Businessmen have urged the government to direct the State Bank of Pakistan (SBP) to facilitate Pakistan-Iran barter trade, instead of creating obstacles in its way.
While hailing the Ministry of Commerce’s efforts to kick-start barter trade with Iran, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Nasser Hyatt Maggo expressed his apprehension over the central bank’s directive.
“The central bank has not offered its facilitative role in barter trade with Iran,” he lamented. “The central bank should be an enabler of trade and growth and not a disruptor.”
When Europe, India and China could do barter trade with Iran, why couldn’t Pakistan? he asked, adding that Pakistan had a greater advantage on the back of a long border and geographical proximity as compared to other countries.
AHL Head of Research Tahir Abbas said that barter trade was indeed a good decision and was expected to boost Pakistan’s foreign exchange reserves.
However, the arrangements should be critically analysed with respect to the current geopolitical situation, especially on the Financial Action Task Force (FATF) front, he said.
Pakistan Businesses Forum Vice President Ahmad Jawad was of the view that barter trade with Iran was the “need of the hour” and it must be in local currency.
“It is our mistake that we ignored Iran before,” he remarked. “Regarding FATF, it is much more political than a technical forum.”
He said that Pakistan had already met more than 80% of FATF requirements, but still the country was in the grey list. “Even the United States has not complied at that level,” he added.
Jawad said that it was high time that Pakistan should redesign its priorities, adding that regional connectivity was vital and in this regard Iran was the key player.
He said that the SBP must establish some mechanism to facilitate trade with Iran.
Union of Small and Medium Enterprises (UNISAME) President Zulfikar Thaver said that barter trade with Iran would promote trade between the two neighbouring countries.
Pakistan could export rice to Iran, as the country had a huge demand for the commodity, and in barter could import oil and petroleum products, he said.
“There are no sanctions on food and medicine,” he highlighted, adding that other items for barter were fruits, vegetables and dates from either side, depending on the surplus.
Electricity and gas could be imported from Iran as well, he said.
“We have to manage and overcome the criticism which will come politically and diplomatically, as we have to see our own interest first and likewise Iran will also manage it,” Thaver stated.
Iran was ready to export petrochemical, steel and liquefied petroleum gas to Pakistan in return for rice, meat and other agricultural products in the barter arrangement, he highlighted.
FPCCI Vice President Nasir Khan was of the view that it was in the national interest to have barter trade with Iran and have marketplaces along borders of the two countries.
He said that Pakistani exporters could export large quantities of rice, meat, pharmaceutical and textile to Iran, which could translate into billions of dollars of income annually and would create millions of jobs.
Published in The Express Tribune, November 7th, 2021.
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