Bid to diversify trade sees Pakistan looking closer to home

NEW YORK: Trucks carrying processed leather from Uzbekistan have arrived in Pakistan, a sign that the southern Asian economy’s efforts to expand land trade in its neighborhood are paying off, Bloomberg reported.

The arrival of the cargo in the northwestern Pakistani city of Peshawar via Afghanistan marks the first step in Islamabad’s goal to grow commerce with central Asian nations to about $1.5 billion per year from less than $1 billion in the past decade.

Pakistan’s focus on central Asia is a departure from its reliance hitherto on three key markets — North America, European Union and China. Expanding trade with resources-rich Uzbekistan, Tajikistan, Turkmenistan, Kyrgyzstan and Kazakhstan also fits Islamabad’s ambition of growing its industrial base.

“We’re too restricted to a few countries,” Abdul Razak Dawood, the commerce adviser to Prime Minister Imran Khan, said in an interview. “But there is a much bigger world.” Pakistan is due to sign a transit and preferential trade agreement with Uzbekistan in July, he said, adding that an accord with Afghanistan would also be wrapped up by June.

Analysts see the new push in the context of Pakistan’s geo-strategic framework, which draws from the economic cooperation championed by Chinese President Xi Jinping as part of his Belt and Road Initiative. While China has channeled investments toward electricity generation in Pakistan as part of its BRI deals, it’s financing has also been focused on gas- and oil-based projects for exploration and distribution in central Asia. “Economy is one part of the strategic outlook,” said Vaqar Ahmed, a joint executive director at the Sustainable Development Policy Institute. “Ultimately you would need economy, trade and investment cooperation to keep excitement in your strategic interests.”