World

Tremendous opportunities exist if both Pakistan and Bangladesh enhance their cooperation & business ties with each other

Both Pakistan and Bangladesh would gain by opening up their markets to each other. Trade plays an important role in any country’s development process as it provides capital, transfer of technology, expertise and employment, and various other economic benefits. With cultural and religious affinity in common, both Pakistan and Bangladesh have many opportunities to establish good trade relationships with each other.

This was revealed in a study carried out by SAARC CCI (regional organization of South Asia) on brief research on Pakistan and Bangladesh trade titled as “Commentary on Pakistan and Bangladesh Trade Relations”. The study presented a detailed analysis of both countries trade relations during the last 15 years and during the pre & post Covid-19 pandemic era as well.  The findings reveal that in almost all the key economic indicators, Bangladesh economic performance outperformed Pakistan specifically during the post-pandemic era.

During the year 2018, Pakistan’s GDP was greater than Bangladesh’s. However, in 2019 and 2020 GDP of Pakistan sharply decreases from US$ 315 billion to US$ 264 billion in 2020. (World Bank Development Indicators).  In terms of the trade, Bangladesh’s total exports are also greater than Pakistan. Since the year, 2010-2011 Pakistan’s exports were greater than Bangladesh’s total exports to the world.

Since 2005, Bangladesh exports consistently rises with positive and significant growth each year and reached to around US$ 39 billion during the year 2020. While Pakistan export also rises but the exports growth and volume remain low throughout these years. During the year 2020 Pakistan total exports to the world accounted for just US$ 22 billion.  In term of major exports, around 80 percent of Bangladesh’s export rely on exports of its labor-intensive manufacturing industry, which is the Bangladesh’s readymade garments industry. whereas Pakistan’s major export mostly rely on cotton, rice, textile, leather, cement, fruit and vegetables products.

Both countries are the member countries of SAARC and are signatories of SAFTA. The results from the bilateral trade shows that trade between both countries increases over time and the huge trade surplus remains in favor of Pakistan. The trade between Pakistan and Bangladesh concentrates only on few tariff lines. Bangladesh jute is the major export to Pakistan, while Pakistan cotton is the major export to Bangladesh, as the exports share of both these products constituted around 80 percent of the total exports to each other.

According to the State Bank of Pakistan statistics, the bilateral trade between Pakistan and Bangladesh was around $692 million during 2020-21 as compared to $743 million in 2019-20. Pakistan’s imports from Bangladesh increased from $49 million in 2019-20 to $76 million in 2020-21 while the exports to Bangladesh showed slight decrease from $695 million in 2019-20 to $616 million during 2020-21.

Both Pakistan and Bangladesh’s major exports share concentration are into European and North American regions. Bangladesh trade with the South Asian region is disproportionately distributed, having little trade share with its member countries in the region except for India, India is Bangladesh ‘s largest trading partner followed by Pakistan. Pakistan’s exports with South Asian countries remain significant as its share of exports constituted around 10-13 percent over the last 15 years.

Although both country’s overall trade increases over time, but trade under SAFTA has not risen, as it should have.  In this context, the study analyzed the sensitive list maintained by both countries under SAFTA and found that both country’s top major exports items are in the sensitive list of each other which are subject to high applied tariff rates. Therefore, to remove the impediments under SAFTA, pruning of sensitive list is very much important to increase the level of trade among the member countries of SAARC in the region, specifically in the case of Pakistan and Bangladesh.

The study also identified both country’s trade potential sectors as well as top potential exports products, in order to enhance the existing bilateral trade flows. Export potential for all goods for Pakistan is valued at US$ 760 million while US$ 57 million of export potential exist for all goods to Bangladesh. Pakistan’s cotton, textile, minerals, fruits, and rice products are the top potential exports sectors for Bangladesh. While Bangladesh jute, apparel, and textile products identified as the top export potential sectors for Pakistan.

There is a high demand of these products in both countries. Moreover, the potential areas where both countries can enhance the economic and trade cooperation are in iron and steel products, processed food, surgical products, automotive parts, edible fruits, chemicals and pharmaceutical products. Bangladesh and Pakistan are home to about 390 million people, around 5 percent of the total human population. If both countries show good signs of cooperation, both countries together can explore the tremendous business opportunities in a market of 390 million people, and bilateral trade between the two will reach a significant level. This will also increase the market of jute, tea and tobacco in Bangladesh, Pakistan will also increase the export of cotton, sugar and yarn products.

According to the recent developments, Bangladesh Commerce Minister Tipu Munshi has said that Pakistan is keen to boost trade and economic ties by maintaining good relations with Bangladesh. With respect to the bilateral trade flows, both countries are yet unable to seize the opportunities of the existing huge market. He said there were problems in some areas in trade with Pakistan. If they are removed, the trade will increase further.

Early on High Commissioner of Bangladesh in Pakistan M Ruhul Alam Siddique said on December 04 2021 while talking to the business community of Pakistan that Pakistan is an important trade partner of his country and Bangladesh also wants strong trade relations with Pakistan. The work is well on the way to ease visa issuance procedure for the businesspeople of Pakistan, he added. Being the major members of SAARC in terms of the size of their economies should find ways to utilize this platform for enhancing their share in the regional trade. There exists a tremendous opportunity for the investors from both countries to invest in each other respective countries potential sectors through Joint Ventures including Tourism, Agriculture, Textiles, Construction Sector, Energy Sector and e-commerce as well. He added.

The study concluded both countries, therefore, need to focus on exploring new avenues to enhance the current trade volume, in this regards the study recommended that, Since the opportunities exist on the paper, an exchange of ideas and proposals, therefore, must be developed to translate the said opportunities into actual trade figures. A concerted effort to bring together the business communities of the two countries into regular contact through trade fairs builds strong linkages that will explore new areas of cooperation, and will boost trade and strengthens trade relations between Pakistan and Bangladesh.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button
Close