Daily Times

Since the olden times, if cities like Quetta, Peshawar, Taxila, Multan and Debal from the areas of Pakistan were linked to the trade routes of ancient Silk Road, then the famous places like Otrar, Taraz, Turkistan, Sairam and Almaty from Kazakhstan were also connected to it.

In modern times, Pakistan was among the first countries to recognize Kazakhstan when it emerged as an independent state on December 16, 1991. This year both brotherly countries are celebrating 30 years of diplomatic ties that were established in 1992 when the First President of Kazakhstan visited Pakistan.

Current years are witnessing the beginning of a new era in the relations of Pakistan and Kazakhstan with prime focus on commerce, trade and regional connectivity. The prospects of stability in Afghanistan, the emerging multipolar world order, the progress of Belt and Road Initiative (BRI) in Central Asia and South Asia are opening new vistas of opportunities for bilateral trade and investment. China Pakistan Economic Corridor (CPEC) is the flagship project of BRI that offers the Central Asian countries access to the warm waters of Gowadar sea port. Then, over 120 projects of BRI are operating Kazakhstan for its significance as global transit hub.

Kazakhstan is the richest country of Central Asia with 18.2 million population, exports of US$ 49.3 billion (59% oil & allied products and 24% metal & amp; chemicals), export partners including China (15%), Russia (12%) and France (9%), forex reserves of over US$ 34 billion, and its economy being divided into 13 special economic zones (SEZs.  With population of 220 million, Pakistan is the 5^th largest market having 90% of the businesses run by SMEs that contribute 60% to GDP. Youth bulge of over 120 million and emerging middle class of 80 million, have potential for sustainable development. On the ease of doing business index, Pakistan ranks at 108^th position with improvement of 39 points in last two years. In every global assessment, Pakistan has been placed among top three countries that have coped with the covid crisis efficiently. Cognizant of this potential, both countries have already embarked upon many projects to usher in a new epoch of trade and commerce.

In November 2021, an MOU was signed for a joint venture of M/S Habib Syndicate, LLP Aktobe Rail and Section Work, LLP Intra Construction and JSC KazakExports for a USD 500 million project to cay out track rehabilitation from Sukkur to Karachi. JSC KazakExports is likely to finance the project with USD 350 million. This B2B project was facilitated by Pakistan Embassy in Nur Sultan and Kazakhstan Embassy in Islamabad.  Executive Director Rao Khalid Mehmood represented M/S Habib Syndicate, on the occasion.

Pharmaceutical sector of Pakistan is very developed. On February 16, 2022, an online meeting of LLP S.K Pharma, main procurement company and single distributor in Kazakhstan, and Pakistan Pharmaceutical Association with its 42 representatives. It would certainly contribute to a greater market share of Pakistani pharmaceutical products.

Last year in November, Kazakh-Pakistan Business Forum was held in Almaty with the assistance of the Embassy of Kazakhstan to Pakistan, the Trade Representative Office of the Pakistan to Kazakhstan, as well as USAID. The forum was attended by more than 100 representatives of the business circles of the two countries. The Pakistani business was represented by manufacturers of pharmaceutical products, textiles, surgical instruments, sports goods, as well as a number of other companies. On the sideline of the event, a number of B2B meetings took place, establishing direct contacts. Here, an MOU was signed between the Federation of Pakistan Chambers of Commerce and Industry and the Foreign Chamber of Commerce of Kazakhstan. The same organizers have scheduled in Almaty a single country exhibition in May-2022 where 60 Pakistani companies would showcase their products.

In recent times, a Joint Business Council (JBC) comprising Federation of Pakistan Chambers of Commerce & Industry (FPBCCI) and Chamber of International Commerce of Kazakhstan has been established that would further improve bilateral trade relations by getting together private business companies. The maiden meeting of the JBC is to be held very shortly.

In another development, the Federal Cabinet has allowed the Kazakh Air Company SCAT Airlines to operate in Pakistan to start air travel between Pakistan and Kazakhstan, enabling direct air travel between the two Countries and helping boost bilateral trade. This would serve as direct air corridor.

From February 25^th to 27^th, Trade Development Authority of Pakistan (TDAP) is organizing first ever Engineering and Health Care Show at Expo Centre Lahore where the relevant SMEs would display their products to the arriving business delegations of 46 countries from the target markets of Central Asia and Africa. With the support of Pakistan and Kazakhstan missions, a 25-member delegation from Kazakhstan is also visiting the event that can provide tremendous opportunities for investments, JVs & brand franchising. The exhibition is meant for industries like agricultural machinery & equipment, automotive/auto parts, chemicals, construction material, cookware & cutlery, cosmetics, electrical machinery, home appliances, furniture & mattresses, handicrafts, marbles & minerals, musical instruments, plastics, packaging and pharmaceuticals etc.

After successful resumption of Islamabad-Tehran-Istanbul Freight Train (ITIFT), extension is being considered to ECO members countries including Kazakhstan. The ITIFT, if by extension connected to China’s Xinjiang Province, can further boost BRI connectivity by linking to Khorgos dryport in Kazakhstan.

Consequent upon all these developments, the momentum of bilateral trade is picking up. After a trade volume of USD 65 million between Pakistan and Kazakhstan in 2019, a growth of 58% was observed in 2020 with a trade of USD 103 million. Now, in only first six months of current financial year, trade quantum of USD 101 million has been reached.  However, it is far below the real potential. Availability of smooth and diversified trade routes through road, rail, air and sea would be most effective in achieving true potential of bilateral trade between Pakistan and Kazakhstan.

The writer is a senior banker based in Kazakhstan, with keen interest in Central Asian studies. He can be reached out at rafeeq_kz@yahoo.com.