Pakistan’s Narrative of Geo-economics needs to grow from within

The narrative of geo-economics, in the backdrop of emerging trade corridors through Pakistan, is mainly focused on transforming the country into a commercial and investment hub. To evolve into a dependable node connecting Asia’s different sub-regions, Pakistan needs to strengthen its economic muscle. CPEC is also being questioned by internal and regional quarters. However, to counter these challenges, Pakistan needs to evolve a regional policy wherein the aim should be to secure new trading allies. Through trading, Pakistan’s position will strengthen regionally. It will also promote the narrative of Pakistan as a transit hub. Thus, to effectively operationalize CPEC, Pakistan needs to develop trade ties with countries of South Asia, and also establish economic outreach to East Asia. Nepal, Bhutan and Bangladesh’s geographic proximity to China and Myanmar, respectively, raises the regional countries significance in the context of connectivity.  Pakistan’s trade access to Bangladesh will open up doors to Southeast Asia. The back channel from ASEAN region to Pakistan via Bangladesh will enhance intra-regional trade. On the regional connectivity account, Bangladesh has provided China with access to the Bay of Bengal. Pakistan, as part of CPEC and Gwadar seaport, is also a supporter of regional connectivity and economic integration. Thus, both Pakistan and Bangladesh regional outlook is more inclined towards connectivity. Bangladesh is the tenth largest export destination for Pakistan. Pakistan’s exports to Bangladesh (US$ 583.44 million) are more in number than its imports (US$ 61.94 million), which puts the trade balance (US$ 521.50) in favour of Pakistan. The prime exports of Pakistan to Bangladesh are cotton (73 percent of total exports), salt, sulphur, plastering materials, lime and cement, edible vegetables and fruits, machinery and inorganic chemicals. The government of Pakistan is making efforts to import raw jute from Bangladesh. The existing trade potential between Pakistan and Bangladesh needs to be exploited. Pakistan should negotiate an FTA or a PTA with Dhaka. There is also a need to have direct connection for supply of trade and goods between the two countries. Pakistan’s trade cargo traverses through Singapore or Colombo to reach out to Chittagong. This indirect flow of trade is slow and expensive. The Bangladeshi businessmen / entrepreneurs’ may be offered opportunities to invest in CPEC related projects, in particular in the Special Economic Zones (SEZs). CPEC can also offer Bangladeshi exporters a route to the West and Central Asia and the Middle East.

On relations with Nepal, Late Z.A. Bhutto once remarked: “Nepal is to Pakistan what Afghanistan is to India; Nepal’s proximity to East Pakistan and the crucial states of Sikkim and Bhutan as well as the province of Assam with its Naga and Mizo freedom fighters, places Nepal high on Pakistan’s foreign policy calculations.” In the prevalent context, Pakistan’s relations with Nepal need to be capitalized upon for political and economic gains. Pakistan-Nepal bilateral trade is US$ 4.8 million (Pakistan exports to Nepal US$ 1.631 million, while Nepal exports to Pakistan US$ 3.166 million). Being landlocked, Nepal’s trade traverses through seaports of India (Calcutta) and Bangladesh (Birol and Banglabandh). With China, Nepal uses the land route option (Tatopani) for trade. Pakistan can offer port facility to Nepal. Besides, the Nepali business community should be welcomed for investments in SEZs being built along the CPEC route.

While there is not much interaction with the SAARC state of Bhutan, Pakistan can tap into its indigenous strengths in social and economic horizon by sending in trade and entrepreneur delegations. This will help in identifying new areas of economic pro-activity, especially as Pakistan is manufacturing low scale tele-communication and IT related gadgets, Bhutan can be a potential market for its produce. Moreover, as Bhutan is a traditional primitive society, Pakistan can also make inroads while introducing its medical expertise in homeopathy and other traditional non-allopathic medicines.

The economic relations with Nepal, Bhutan and Bangladesh will set the pace for regional integration. It will also revitalize the concept of SAARC. The idea should be to promote trade within South Asia and to reach out to adjoining regions’. An economically strong South Asia will attract investments from Southeast Asia and Northeast Asia. Thus, Pakistan’s narrative of geo-economics and human security needs to grow from within and for that the smaller South Asian countries are a contributing factor. To enhance trade with Nepal and Bhutan, Pakistan needs to establish economic relations with India (bilateral trade US$ 514 million). India’s adamant attitude not to let Islamabad have a level’s playing field in addressing bilateral irritants have always hampered meaningful progress. In view of India’s transregional growth amidst the ties ASEAN (India-ASEAN trade US$ 70 billion) and economic cooperation with China (India-China bilateral trade US$ 115.41 billion), Pakistan can offer transit facility to India to reach Afghanistan and Central Asia. In reciprocity, Islamabad may demand land access to Bangladesh, Nepal and Bhutan.

Note: This article appeared in MinuteMirror, dated 18 April 2023.
Disclaimer: The views expressed in the article are of the author and do not necessarily represent Institute’s policy.