Going beyond the IP pipeline

The fate of the IP pipeline project continues to hang in the balance

The Iran-Pakistan (IP) pipeline was always a problematic venture, pursued only because an energy-starved nation was desperately looking for avenues to meet its requirements. With most sanctions on Iran having been lifted, the IP pipeline started grabbing headlines once again. However, soon after, the project was nipped in the bud as the US Department of Energy stated that the fate of the pipeline was still to be judged. Pakistan, on several occasions and on different platforms, has stated that it wants to continue pursuing the completion of the project, yet work on it appears to be stalled. Simultaneously, Pakistan is vigorously working on other projects in a bid to meet its energy needs. The fate of the IP pipeline project, therefore, will continue to hang in the balance.

But there is more to bilateral trade relations with Iran than just the IP pipeline and our policymakers must remember that. As our neighbour moves towards coming back into the international fold, there is much that Pakistan can achieve through its next-door partner if diplomatic relations run on an even keel. Pakistan’s export receipts amounted to $211 million in FY13, shooting down to $128 million the following year, according to central bank figures. With different sectors, including IT, sports goods and surgical instruments, eager to make their mark, Iran presents an ideal market. Cynics would argue that Pakistan lacks in competitiveness and exports items that most countries can also obtain from elsewhere. But geographic location counts and that must not be forgotten. It means that an entirely new market is available and with strategic planning — that focuses on a variety of exports ranging from auto parts to e-commerce — bilateral trade has the potential to expand. Banking channels may take some time to be established, but with Iran ready to make a comeback to international trade, Pakistan needs to be ready to knock its doors. We need to enhance our understanding of the Iranian market. Curbing smuggling and establishing formal channels should be the next step. The stalling of the IP project shouldn’t deter us from pursuing what can be a very exciting opportunity for the Pakistani economy.

Published in The Express Tribune, February 17^th,  2016.

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