Stephen Cohen, an American scholar, was apt when he said, “Although history has been unkind to Pakistan, its geo-strategy has been its greatest benefit.” Undeniably, Pakistan’s geo-strategic location has great geo-economic value that policymakers have yet to understand. The decision to establish markets alongside Pakistan’s western borders highlights our weak economic ties with Afghanistan and Iran. Apart from China, Pakistan is yet unable to reach the untapped large markets of Central Asian Republics, the Eurasian Heartland and hydrocarbon hub that resides beyond Afghanistan. Furthermore, due to constant border disputes and skirmishes with India, our trade volume remains low. In encapsulation, as per official figures, the intra-regional trade has declined significantly in the last ten years from 12.11% in 2011 to 7.4% in 2018.
The decline in regional trade can be attributed to multiple reasons. Security concerns with respect to unsafe western borders including insurgencies, proxies and separatist movements along with the border disputes with India at the backdrop of the Kashmir issue has hampered regional trade integration. Furthermore, India’s hegemonic and expansionist designs in the region with respect to its decision to revoke Kashmir’s semi-autonomous status has led Pakistan to downgrade its diplomatic and economic ties with its antagonist neighbour. The trade volume with Afghanistan, however, rests at $3 billion only, far below its actual potential, due to Afghanistan’s volatile security situation and trust deficit that rests between the two states resulting in Islamabad’s refusal to allow transit trade rights to Afghanistan and India. In addition, as Iran remained crippled under US sanctions, the possibility of fomenting trade ties with Tehran is a pipe dream for now.
If history be the guide, it becomes clear that intra-regional relations play a fundamental role in fostering economic development of countries. Moreover, it might be absurd to expect solely of Pakistan to break all trade barriers that limit regional integration. In this respect, as the world witness a shift from geo-politics to geo-economics, all the regional stakeholders need to work towards regional cooperation and interdependency in order to foster economic growth and increases the chances of regional peace and harmony.
Hadia Mukhtar
Karachi
Published in The Express Tribune, September 23rd, 2020.
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