Pakistan-Bangladesh economic ties
TWO South Asian counties with Muslim majority are trying to reduce gap that other countries have taken advantage of. Pakistan and Bangladesh are making a push to build diplomatic, economic, cultural ties that could upend decades of historic arrangements in the region.
Number of developments have been made for diplomatic ties. For instance, the Premiers of Pakistan and Bangladesh exchanged mango gifts which is a sign of development in terms of relations. Almost half of the population of South Asia is under poverty.
It is sad that many South Asian countries are seen preferring distant countries as trade partners instead of their closest neighbouring economies. A 2018 study by the World Bank strongly argues that regional cooperation in South Asia can power the entire region to grow faster and improve living standard.
It has been estimated that in 2015, the trade between Bangladesh and Pakistan had a potential to be valued at $1,376M, but instead of it only $837M, was recorded
It is because of the gap between trade potential and actual trade which is attributed to the gap in bilateral trade between Pakistan and Bangladesh.
Hence it is stated that a stronger regional cooperation for sustainable peace and prosperity can be achieved through the improvement of bilateral ties and people to people exchanges.
The reason for enhancing bilateral trade with neighbouring countries can be explained by the price hike of onion in Bangladesh in 2019 which reached at TK 300(USD 3.54).
Onion prices were hiked because of Indian government banned export of onions to Bangladesh.
To bring down the price of onion, Bangladesh started importing onions from other countries like China, Pakistan, Turkey and Uzbekistan.
It was an important lesson for Bangladesh from the price hike of onions, that not depending solely on one country for any essential item, and enhancing bilateral relations with neighbouring countries is a must to curb the price of essentials.
Currently, Bangladesh’s volume of exports to Pakistan is very small. It is as small as $72 million which is just 0.2% of her total export.
And import from Pakistan is small as well which is $784 million and it is just 1.3% of Bangladesh’s overall imports.
And from Pakistan’s side it is 3.3%. Trade between the two countries consists of only a few things like textile fibre, paper yarn and woven fabrics.
Other major exports are tobacco, cotton, apparel and clothing accessories which constitutes nearly 90% of Bangladesh’s imports from Pakistan.
Bangladesh and Pakistan should sign a bilateral free trade agreement. The reconciliation process between the two countries, indubitably, is a welcome step.
There is dire need for policy shifts by both governments to resolve the old issues in an expeditious manner to meet new challenges posed by the emerging world order.