‘Pakistan-Kazakhstan trade value holds immense potential’

KARACHI: Trade value between Pakistan and Kazakhstan could increase manifold from the existing below $25 million, but lack of logistics network keeps the immense bilateral trade potential underexplored, a business policy advocacy group said.

Pakistan mainly exported rice, medicaments and medical equipment worth $23.93 million, a minuscule 0.5 percent of the country’s total exports, to the central Asian nation in 2016. “A much larger trade value is possible between the two countries,” Pakistan Business Council (PBC) said in a report.

PBC estimates exports trade potential at $182.28 million, identifying four items with major export potential for Pakistan. They include medical appliances ($73,95m), medicaments for therapy ($70.63 million), medicaments with hormones ($28.91 million) and bandages ($4.25 million).

Kazakhstan, having a population of less than Karachi, is a landlocked country with restricted access to the open seas. The central Asian nation’s top origin of imports includes Russia, China and Germany. The council, which represents 62 member organizations from the private sector, said the bilateral trade is very limited despite a huge potential, “which unfortunately is not being achieved due to the lack of a logistics network.”

“The law and order in Afghanistan has been unstable for many years which makes trade between Kazakhstan and Pakistan unsafe and time-consuming,” it added. The trade route between the two countries relies on the Regional Cooperation for Development Highway, which goes through Afghanistan to Almaty Kapshagay Highway in

Kazakhstan. Pakistan Business Council further said imports from the central Asian country could also increase to as much as $75.32 million from the current $2.71 million. Pakistan’s top 10 imports, in 2016, include sodium dichromate, dried lentils, road tractors, fermented tea and filament yarn of polyester.

Items with the highest import potential for Pakistan include dried lentils ($33.59 million), parts for boring or sinking machinery ($20.23 million) and boards and cabinets for electric control ($12.13 million). Kazakhstan earns more than $36 billion a year from exports, 75 percent of which comprise of natural fuels.

The country’s top export destinations are Italy, China and Russia. The two countries have enjoyed cordial relations since the latter’s independence from Soviet Union in December 1991.

Kazakhstan initially enjoyed a positive trade balance with Pakistan which turned negative in 2011 when imports from Pakistan increased to $29.58 million, while exports decreased to only $3.95 million. Kazakhstan ranks 35 amongst 190 countries in the ease of doing business index published by the World Bank as compared to 147 for Pakistan.