Pakistan-Myanmar Trade Ties: Likely Prospects

 

Myanmar is a Southeast Asian country. Oil and natural gas dominate Myanmar’s exports. Myanmar is the lead country in agriculture and energy sectors in the regional grouping – BIMSTEC (Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation). Myanmar’s main trading partners are China, India, Japan, Indonesia, Germany and Hong-Kong. Pakistan launched its ‘Vision East Asia Policy’ back in October 2003. The policy aimed to strengthen trade ties with the ASEAN economies. Myanmar being an ASEAN member state holds significance for Pakistan.

During the 1950-60s, Pakistan’s trade with Myanmar (then Burma) was the largest as compared to other Southeast Asian countries. However, over the years, Pakistan’s trade with Myanmar deteriorated. In 1995, bilateral trade was US $ 34 million, it declined to US $ 10 million in 1999. Later, in 2000, trade improved to US $ 24 million. The present trade volume between Pakistan and Myanmar is US $ 70 million far less than their latent potentials. Pakistan’s exports to Myanmar include medicament mixtures, cement, medicinal plants, leather, cotton fabrics, electro-medical apparatus. Whereas fruits, vegetable products, wood, seafood, jute and other textile fibers, medicinal plants are being imported from Myanmar. A Bilateral Agreement in Science and Technology exists between the two states. It was inked during former President General Musharraf’s visit to Myanmar in May 2001. In January 2012, former President Asif Ali Zardari visited Myanmar. The visit focused to enhance bilateral trade between the two countries. Pakistani side proposed for a Preferential Tariff Arrangement (PTA) along with a Free Trade Agreement (FTA). Establishment of a joint ministerial commission as well as cooperation in the oil and gas sector was also proposed. However, no substantial progress has been made in these areas.

To impart dynamism to Pakistan-Myanmar trade ties, an economic diplomacy along with pro-active marketing of Pakistani merchandise in Myanmar and vice versa should be employed. The business communities of the two countries can play a leading role by undertaking joint ventures in various sectors of the economy. Exchanging trade delegations, holding exhibitions in each other’s country, joint ventures and better travelling facilities, would set the stage for greater economic cooperation. Likewise, bilateral production sharing arrangements involving the manufacturing process and exchange of transfer of technology to each other’s country should be encouraged. This would allow the two countries to specialize in different production processes and benefit from the specialization process.

Some potential areas of cooperation could be leather products, textiles and clothing, and light engineering. Besides, as in Myanmar, only 30 percent of the population uses cellular phones, whereas the massive 70 percent population remains untapped. Pakistan could offer its skilled workforce in telecommunication to Myanmar to improve its services and infrastructure in this sector. Another area which could also be useful in bringing the two countries closer is religious tourism. Pakistan had been home to the Gandhara civilization; the ancient and archaeological sites would be of interest to the Buddhist population of Myanmar. Meanwhile, cooperation in the field of education, wherein, Myanmar students could be offered to study in Pakistani medical, engineering and business colleges is also an area in which both states can cooperate.

Seen at the regional front, both Pakistan and Myanmar have inclination towards sub-regional cooperation.Pakistan is a Sectoral Dialogue Partner (SDP) of ASEAN. Pakistan is supportive of ASEAN Economic Community and also aspires to be a part of the proposed Regional Comprehensive Economic Partnership (RCEP). Myanmar also supports the developmental sphere between South Asia and Southeast Asia. Myanmar holds an Observer Status in SAARC (since August 2008). Myanmar is also a part of regional groupings – BIMSTEC, Mekong-Ganga Cooperation (MGC) and India Bangladesh Myanmar Sub-Regional Cooperation (IBM-SRC) thus, reflecting Myanmar’s tilt towards regional integration. These projects are significant in terms of inter-regional cooperation. But so far have not been able to achieve desired outcome, due to the domestic political, foreign and economic factors at play.

Pakistan’s geographical location could be of strategic significance for the East Asian economies to establish connectivity with other regions. In this regard, Myanmar’s hydro-carbon reserves could be of immense importance to the South Asian countries. Here, too, both Pakistan and Myanmar can cooperate. The proposed inter-regional road corridor – Turkey, Iran, Pakistan, India, Bangladesh and Myanmar (TIPI-BM) is an endeavour to connect Central and West Asia with East Asia, with South Asia functioning as a land bridge. Both Pakistan and Myanmar are part of this road corridor. Another regional project having immense economic potential is the ‘China-Pakistan Economic Corridor’.

The corridor extending from Kashgar to Gwadar will integrate the economies of China and Pakistan. It will also accelerate several economic zones and physical links between various regions of the world. It would be the primary gateway for trade between China and the Middle East and Africa. In particular oil from the Middle East could be offloaded at Gwadar, which is located just outside the mouth of the Persian Gulf, and transported to China through the Balochistan province in Pakistan. As Chairman of the Pakistan-China Institute, Senator Mushahid Hussain Sayed pointed out that the economic corridor “will play a crucial role in regional integration of the ‘Greater South Asia’, which includes China, Iran, Afghanistan, and stretches all the way to Myanmar. These countries will connect through cooperation in energy and the economy.”

Amna Ejaz Rafi

Researcher, Islamabad Policy Research Institute (IPRI)

 

The article was published by Pakistan Observer on April 15, 2015

Disclaimer: Views expressed are of the writer and are not necessary reflective of IPRI policy