Barter with Iran

Iran continues to pay a price in terms of international isolation for its nuclear ambitions. Having fallen afoul with world’s leading powers, for the aforementioned reason as well as for its perceived meddling in the Middle East, Tehran finds its economy down in the dumps.

The sanctions regime slapped on Tehran means it cannot do business with other countries in dollar-denominated contracts. The nuclear deal it had struck with world’s leading powers, which had given it a big opening to do business, faltered after US President Donald Trump announced Washington was pulling out of it. That led to a further shrinking of space for Tehran. One way of keeping itself afloat was to enter into barter trade – goods in exchange of goods – with its business partners to circumvent the restrictions imposed on the use of banking channels. This is exactly the route Iran is eager to follow, especially with its neighbours. One of its diplomats recently pressed home the point that encouraging barter trade will benefit both Tehran and Islamabad.

Speaking at a function of business people in Lahore, Iran Consul General Reza Nazeri employed familiar platitudes, such as the two countries share common borders and cultural bonds and that Iran had always tried to bolster two-way ties, to make a case for increased business. He emphasised how the two nations can profit from a regular exchange of trade delegations. To give impetus to business, he announced that Iran will organise an exhibition of its products in Punjab. He touched upon other areas as well where the two countries could join hands. For instance, he lavished praise on Pakistan’s distinguished status in milk production and said Iran’s experience in the dairy sector could be a great help if the two joined forces. Likewise, construction and tourism are the other two major areas where they could jointly unlock the business potential.

The barter trade point the diplomat emphasised upon needs to be looked into because it is not Iran alone which stands to benefit from it. Pakistan, with its fast depleting foreign exchange reserves, is equally in need of finding ways to preserve its small treasury. Barter trade could well be the answer.

Published in The Express Tribune, October 22^nd, 2018.

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