Govt banks on barter system to overcome trade deficit

Minister says Pakistan willing to import machinery in exchange for goods

KARACHI:

The government introduced the barter trade system to overcome trade deficit and the dollar crisis with a view to import machinery in lieu of goods export, Commerce Minister Syed Naveed Qamar said on Friday.

In an informal chat with journalists, Qamar said that the federal cabinet had approved a ‘Barter Trade Framework’ which had been developed because of the lack of banking channels.

“The Barter Trade Framework will be used for trade with Central Asia, Africa and China, Afghanistan and Iran,” the minister said. “Pakistan is willing to get machinery in exchange for goods under the barter system,” he added.

The minister spoke with commerce reporters during a visit to the Trade and Development Authority of Pakistan (TDAP), where he met with Chairman Zubair Motiwala. He said that the government was taking steps to overcome economic challenges.

Responding to a question, the minister emphasised that the country’s economic challenges stemmed from political instability. He stressed the need for maintaining good relations with both China as well as the United States.

“Pakistan needs both China and America,” Naveed Qamar said. The minister revealed that talks were also going on with the Gulf Cooperation Council (GCC) countries on a free-trade policy.

Qamar said that Pakistan had got a two-year extension in European Union’s (EU) Generalised Scheme of Preferences (GSP)-Plus programme, adding that efforts were afoot to “make it a tax-free programme”.

When asked about the trade with India, the minister favoured the bilateral trade with the neighbour but said that the situation changed since Hindu nationalist Narendra Modi became the prime minister.

“Mutual trade is important in the region and Pakistan is keen on the trade with India but the Modi government's policies are hostile to Pakistan. Modi government is playing politics to win elections. Therefore, the bilateral trade is impossible.”

The minister assured that incentives would be given to encourage farmers to cultivate cotton. “To protect the farmers, the price of cotton has been increased to Rs8,500,” he said, adding talks with foreign companies on hybrid seeds were under way.