During their meeting in Astana, Kazakhstan, on the fringes of the Shanghai Cooperation Organization-Plus conference, Russian President Vladimir Putin and Prime Minister Shehbaz Sharif decided to strengthen their trade relations.
While Mr. Sharif advocated for restoring and increasing commerce under a barter system, they talked about the problems preventing financial and banking interconnection to ease bilateral trade flows. In a good response, Mr. Putin stated that improved commercial links had led to the recent recovery of relations between Moscow and Islamabad. He expressed optimism that Pakistan and Russia would strengthen their collaboration in agriculture and energy. During his visit, Mr. Sharif reiterated calls for bolstering Pakistan’s economic and trade ties with the Central Asian states, urging their leaders to build road and rail connections and providing them with transit rights through this nation so they can conduct business with the rest of the world via the Karachi port.
During his speech at the opening of the trilateral summit between Pakistan, Turkiye, and Azerbaijan, he suggested three institutional measures to improve trade relations. In order to establish commercial routes to Central Asia, he also stated plans to hold a summit on regional connectivity. Though it is unlikely, Mr. Sharif’s meetings with regional leaders show his intention to break Pakistan’s increasing trade isolation by linking the country’s economy with those of other nations in the region, even though rail and road connectivity with Central Asia is a long-term goal.
Despite its strategic location and ability to develop into what Mr. Sharif refers to as the “ideal trade conduit” in the region, Pakistan’s economy is still the least integrated in the area, which says volumes about the “trade isolationist” mentality of our leaders.
In actuality, Islamabad is not a member of any significant regional trade associations. Since their founding, Pakistan has not participated in the two regional economic blocs it is a part of, the South Asian Free Trade Area and the Economic Cooperation Organization. Our portion of trade with the ECO and the countries of South Asia is rather little, despite the fact that other bloc members have greatly increased economic ties. Pakistan shares borders with four nations, but our trade relations with China are the most significant. Our trading status with the other three is dreadful: India, Iran, and Afghanistan.
Pakistan’s economic integration within the region has been hindered by various factors. However, the primary causes of our persistent economic isolation are our political and territorial disputes with neighboring countries, perceived and actual security concerns, a limited range of exportable products, and our dependence on Western aid and trade. Trade blocs have significantly aided in the economic development and competitiveness of each of their member states. Will Mr. Sharif succeed in realizing his goal of liberalizing commerce and collaboration with South and Central Asia in order to integrate Pakistan into the region? That is still to be determined.
