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SAARC and Pakistan

By : Fahad Ahmed Click to edit Master subtitle style Syed Salman Abbas M.Omer Mukhtar Zaid Farhan Kardar

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Introduction
TheSouth Asian Association for

Regional Cooperation(SAARC) is an organization of South Asiannations, founded in December 1985 byZiaur Rahman.

Dedicated to improve the economic,

technological, social, and cultural development emphasising collective selfreliance in the region.
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Countries In SAARC
Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka Afghanistan
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Pakistan and Afghanistan


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Overview
Both are Islamic countries and culture is same

to a great extent, past

Governance issues have been conflicting in Afghanistan is a landlocked country Pakistan has the resource of water transit A very long border Strategic interests of both physical location of Afghanistan provides

Pakistan with opportunity to send its goods to central Asian sates 5/5/12

US $1 billion trade annually, but it is very

asymmetric

Most part by imports from Pakistan, as

compared to very little formal Afghan exports


Transit to Afghanistan through Pakistan is

currently broadly governed by the 1965 Afghan Transit Trade Agreement (ATTA)
Investments from both sides in infrastructure National Trade and Transport Facilitation

Committee (NTTFC) under the Trade and Transport Facilitation Project (TTFP)

5/5/12 National Trade and Transport Facilitation

Problems in trade
Poorly designed and managed borders and

port stations,
Long waiting times at the borders which

generates unofficial payment transactions,


Smuggling Insecurity in Pakistan and Afghanistan, Strong lobby that does not want the trade

to happen freely,

Lack of skilled Human Resource, 5/5/12

Low poverty rates on both sides, American presence in Afghanistan, Indian interference in both regions, Lack of formal financial and insurance

systems,
Lack of infrastructure High resistance to immigration

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Risks
There is no free economic zone in

Afghanistan to support foreign investors in establishing their business countries have to face double taxation on their revenues while operating from other country Treaties with Afghanistan

Governments and investors from both

Pakistan has no Bilateral Investment

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Pakistan has signed an agreement with

Turkmenistan and Afghanistan to construct a pipeline for the supply of natural gas to Pakistan from Turkmenistan

If smuggling is controlled, the trade volume will

increase more than 50%

Indian interference should be controlled

Double taxation should be abrogated 5/5/12

Click to edit ANGLADESH Master subtitle style

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Pakistan and Bangladesh


Five Pakistani heads of government made official

visits to Bangladesh since the 1980s and numerous trade and cultural agreements have been signed

Trade between the two countries currently stands

at $340 million

'negligible when taking into account the combined

population' (of both countries).

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Rationales of Pak-Bangladesh Trade homogeneity and mutual Cultural


acquaintance
Economic complementarities Huge market of about 300 million people Homogenous consumer behavior and

buying pattern

Existence of similar distribution system

and selling strategy state

Almost symmetric economic development Similarity in life style and standard of living
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Year

Export to Pakistan

Import from Pakistan

Trade Balance

2000-2001

32.08

95.22

(-) 63.14

2001-2002

28.60

67.32

(-) 38.72

2002-2003

31.50

68.68

(-) 37.18

2003-2004

45.11

112.70

(-) 67.59

2004-2005

63.12

138.92

(-) 75.80

2005-2006

57.74

150.11

(-) 92.37

2006-2007

61.06

181.40

(-)120.34

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Most prospective sectors for Joint Venture


IT

Textile

Leather Goods

Agro-based Industry

Light Engineering
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Deterrents to accelerated bilateral trade and economic cooperation


Perceived political uncertainties Absence of direct shipping links Lack of frequent interaction and exchange of

required information between our businessmen

Absence of cargo flights and passenger flights Lack of exchange of frequent private sector

delegations
Failure to participate in each others trade

fairs

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Suggestions
Recognition of Special and Deferential Treatment

for Bangladesh

Tariff reduction schedule under SAFTA

Simplification and harmonization of customs

procedure.

Mutual recognition of certifying and testing

institutes.

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MALDIVES

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Maldives
Pakistan and Maldives agreed to expand

their bilateral relations especially in trade, communication and manpower training.

Pakistan and Maldives have a very small

trade link
Maldivesimportsfrom Pakistan were $6

million that could be further enhanced byincreasingbilateral trade and exploring different trade areas. 5/5/12

Opportunities Between two Countries


Pakistan can continue PIA flights to

Maldives regularly which would improve connectivity. vegetable, fruit and other products from Pakistan. from Pakistan which can also be traded.

Maldives has a vast scope for import of

Maldives has a high demand for mangoes

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Tourism is the main industry

ofMaldivesseconomyas about 700,000 visitors annually visit islands of this country andaddedthat both countries could reap benefits byincreasingbilateral cooperation in this area.

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SRILANKA

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Relationsbetween theIslamic Republic of

Pakistanand theDemocratic Socialist Republic of Sri Lankaare generally warm.

Pakistan assisted theGovernment of Sri

Lankain supplying High-Tech military equipment to theSri Lankan armyin thecivil waragainst theLiberation Tigers of Tamil Eelam.
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TRADE
Pakistanis the second largest trading

partner of Sri Lanka inSouth Asia.

Sri Lanka was the first country to sign

aFree Trade Agreementwith Pakistan, which became operational from June 12, 2005. 4,000 items can be imported toPakistanfromSri Lanka.

The total turnover of bilateral trade

between Sri Lanka and Pakistan in 2005 5/5/12 recorded US $ 150 million, which grew up

FUTURE PROSPECTS
The need for exchange of visits by gem

and stone cutting experts of the two countries can be done .

Increasing the import of tea from Sri Lanka

and bilateral trade should be done in local currency.


Pakistan could train officers of Sri Lankan

police and intelligence agencies.


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NEPAL

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NEPAL
The relation between Pakistan and Nepal

fully established between 1962 and 1963

Ayub Khan, the president of Pakistan made

a special visit to Nepal.

Both nations have since sought to expand

trade, strategic and military cooperation.

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Pakistan agreed to establish an air link with

Nepal.

In 1963 Pakistan agreed to provide Nepal

with free trade access and transport facilities.

Pakistan assisted Nepal by offering US

dollars 5 million of credit

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Trade
The two countries although do not have

quite huge amount of trade.

The total amount of trade between the two

is almost US dollars 4.8 million.

Pakistans total export = US$ 1.631 million Nepals total export

= US$ 3.166 million

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The Efforts
Nepal-Pakistan Chamber of Commerce and

Industry was established on February, 2007.

Efforts to promote bilateral trade especially

in textile, oil seeds, extraction of oil and tourism to be carried out.


Recently Nepal has started importing arms

from Pakistan.
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Prospects
Pakistan should transfer technology and

enhance trade with Nepal.

Duty-free exports Trade exhibitions Exchanges of visits by business

delegations.

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BHUTAN

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BHUTAN
GDP Composition :
Agriculture = 24.7 Industry Services

= 37.2 =38.1

Major Industries :
Cement Wood products Processed fruit
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Trade With Pakistan


Most of the trade is done with India.

Only 0.01 of their total exports are linked to

Pakistan.
Only 0.07 of their total imports are linked to

Pakistan.

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Comparison Of Trade
Year 2002: Exports = US$ 0.319 million Imports = US$ 0.387 million

Year 2008: Exports = US$ 0.021 million Imports = US$ 0.117 million

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EXPORTS
Major items of export from Pakistan to

Bhutan(Year 05) :

Cotton yarn and fabrics (US$ 0.1 million)

Pharmaceutical products (US$ 0.005

million)

Salt (US$ 0.002 million)


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IMPORTS
Major items of imports from Bhutan to

Pakistan(Year 04) :

Organic chemicals (US$ 0.107 million)

Articles of apparel (US$ 0.103 million)

Man made filament and yarn (US$

0.071million)
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Prospects
Involvement of government officials.

Organizations and committees to be

formed.
Exports of food items.

Imports of wooden products


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DIA
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India and Pakistan are the two largest

economies in South Asia that have very low levels of bilateral trade. and political tensions.

This had been the result of border disputes Trade (including official and unofficial)

between the two countries stood at around US$ 2.5-2.6 billion in 2007-08 billion or 2 to 4 times its current levels.
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it could potentially be as much as US$ 5-10

A large part of this trade happens through

Dubai, increasing costs of transportation and time taken for goods to reach their destinations.

While Indias tariffs are now far lower at an

average of 13 per cent that they used to be two decades ago, they are still high at about 40% for most agricultural goods.
And Pakistans export interests will be in

agriculture, textiles, sporting equipment and leather goods.

5/5/12 In addition to these high tariffs which

Indias unofficial and smuggled exports to

Pakistan are estimated at US$2 billion, while the official figures are a mere US$ 94 million. under the list of imports to Pakistan, a much larger number find their way into Pakistan, from India to Bandar-e-Abbas in Iran, to Kabul and later to Peshawar.

Though officially only around 700 items are

The selling price of these goods in

Pakistans markets is substantially inflated due to this circuitous trading route. 5/5/12

Pakistan is the second-largest consumer of

tea in the world, a market that can be exploited by India.

Indian drugs are 30 per cent cheaper. Pakistan has banned the import of textile

machinery from India and manufacturers import the machinery mostly from Germany.
Pakistans annual demand for tyres stands

at 10, 00,000, whereas it produces only 200,000. Yet, it has imposed a 46.6 per 5/5/12 cent duty on popular Indian truck tyres.

Textiles and Clothing


The textile and apparel sector continues to

be the driving force for economic growth in Both India and Pakistan. This sector contributed 18.8 percent in India and 65.6 percent in Pakistan, of the total value of exports in FY04. range of products is considered a competitive supplier of cotton goods.

Pakistan, although a supplier of limited

Presently trade in textile and clothing

between India and Pakistan is almost nonexistent. 5/5/12

Iron and Steel


India was the major source of raw material

(iron ore) to this vital industry and accounted for 69.2 percent of the total imports of iron ore in FY04 followed by Australia (19.9 percent) and Iran (10.9 percent). established steel industry and is a net exporter of steel and steel products.

Unlike Pakistan, India has a well

Pakistans iron & steel product imports

from India were just a small fraction of its total imports. 5/5/12

Chemicals
During FY04, imports of chemicals stood at

$2.8 billion, an increase of 29.5 percent over the last year.

Compared to Pakistan, the Indian

chemical industry is well established and has Shown impressive growth over the years contributing about 6.7 percent in the Indian GDP. in the world, and third largest in Asia.

In terms of volume, it is the twelfth largest With a current turnover of about $30.8

5/5/12 billion, it accounts for 14 percent of the

Pharmaceuticals
There are about 316 pharmaceutical

manufacturing companies including 30 multinationals (47 percent share), which are meeting around 80 percent of the countrys requirement. materials used for manufacturing of medicines are imported from China, India, Japan, United Kingdom, Germany, Netherlands and others. 4.3 percent and 6.8 percent of5/5/12 its total imports of chemicals and pharmaceutical

Almost 95 percent of the basic raw

During FY03 and FY04, Pakistan imported

Automobiles
Compared with Pakistan, India has a strong

engineering base and has successfully created a sizable capacity for production of vehicles.

Pakistan can import automotive

components and spare parts from India at a lower price as presently these items are being imported from the Far East at higher prices.

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The potential advantages of trade

liberalization for Pakistan appear to be large. non-tariff barriers include the potential for boosting productivity and economic growth, and can also extend to promoting regional cooperation in all areas. benefit Pakistani consumers, since product prices fall and consumer choice increases with reduced trade barriers. 5/5/12

the advantages of dismantling tariff and

Trade liberalization will unambiguously

Given the large and growing size of its

effective market the economic losses to India would be minute while political good will and returns would be substantial over time. much better off economically if they are able to penetrate the buoyant Indian market. neighbors would aid rather than hinder India in moving towards its long term goals. 5/5/12

Pakistan, Bangladesh, Sri Lanka will be

Friendly, peaceful and irritant-free

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