Shanghai Cooperation Organization Provide New Opportunities for Pakistan
- Pakistan has an opportunity to revive its economy with the help of the regional bloc, its platforms, and member states.
- Pakistan has always focused on the Chinese market and lacks any major policy for developing economic and trade ties with Russia and Central Asian states.
- In order to develop a prudent policy, Pakistan should study governance and market structure of all SCO member countries.
China is a powerful economic player and has taken lead in refining the global economic and governance system.
China is trying to build partnerships that would be beneficial for all the participants and contributors and the Shanghai Cooperation Organization (SCO) is one of these partnerships.
The organization was created to resolve issues related to border management and security. However, later its scope was widened. Presently, SCO is the biggest regional organization in terms of its size and population.
Members of SCO constitute 45% of the world population, 23% of the landmass and 25% of gross domestic product (GDP) of the entire world. The total worth of GDP is $14.5 trillion.
The focus of the Shanghai Cooperation Organization is gradually shifting towards economic linkages and development of member countries.
In 2018, during the heads of state meeting, it was emphasized that the trade procedure should be simplified for intra-regional trade. The SCO’s declaration, in 2019, again asked member states to accelerate efforts for wider economic cooperation and enhancing trade.
It has been already noted that China has increased its trade with SCO members in the past few years. The total trade of China with SCO members is worth $337 billion including countries having the status of observer and dialogue partner, exhibiting 19% growth.
The major trade partner of China in Russia and India having the trade of $106.65 and $95.87 billion respectively.
Russia is the biggest exporter to China in the SCO group with exports of $58.58 billion and India is the biggest export destination with shipments worth $77.02 billion.
Russia and China, the leading members of SCO, have presented their visions of future economic development through Eurasia Economic Union (EEU) and the Belt and Road Initiative (BRI). Both initiatives will present excellent prospects for economic development in the future.
As a member of SCO, Pakistan has an excellent opportunity to revive its economy with the help of the regional bloc, its platforms, and member states.
In a bid to capitalize on the opportunity, Pakistan will have to devise a relevant policy. First, it should learn from the past.
Pakistan has made many mistakes and one of them is ignoring SCO countries, missing the dynamics of Central Asian states and reliance on western markets.
Pakistan has increasingly focused on the Chinese market in the past few years and lacks any major policy for developing economic and trade ties with Russia and Central Asian states.
Two-way Trade Opportunity for Pakistan:
Central Asia provides Pakistan an opportunity for two-way trade and Pakistan has the potential to export finished products and some agricultural commodities. Moreover, it can also benefit from the energy and mineral resources of Central Asia.
Russia Can Assist Pakistan In Adopting New Technologies:
Pakistan can benefit from the Russian market as well. Russia can be helpful for Pakistan in developing scientific knowledge and adopting new technologies. Further, Russia is also interested in using Gwadar Port for trade.
Except for China, current trade statistics are very poor with SCO members. Pakistan’s exports to Uzbekistan are only $17 million and imports are $33.31 million. In trade with Kazakhstan, Pakistan’s exports stand at $86 million and imports at $33.11 million.
Pakistan’s exports stand at only $94.06 million with Tajikistan and imports are valued at $33.45 million. While Kyrgyzstan is a very vibrant economy of Central Asia and Pakistan’s trade with it is very low. Pakistan’s exports to Kyrgyzstan are worth $15.11 million and imports are $0.121 million.
Pakistan’s Low Trade with Russia:
The statistics show a very discouraging picture in trade with Russia. There is a troubled history of relations between Pakistan and Russia and Pakistan’s trade with Russia is very slim.
The international trade statistics show that Pakistan’s total exports to Russia are only $157 million and imports are worth $375 million.
SCO to Pave Ways for Better ties between PAK and IND:
Pakistan’s economic connection with India is very weak and being neighbors, bilateral trade is very low as compared to the potential. At present, Pakistan’s total imports from India are $1.8 billion and exports worth $350 million. There is hope that SCO will pave the way for better ties between Pakistan and India.
The Shanghai Cooperation Organization and China have provided an opportunity to Russia and Pakistan to break the ice and now they are working on further improvement with high hopes.
Pakistan has been consistently ignoring the region and has not tried to learn the governance system and market structure of these countries.
In the case of Central Asia, major reasons for insignificant trade include low priority attached to the region and self-perceived assumptions.
The discussion concludes two important lessons for Pakistan:
- Pakistan should exploit these markets for economic revival.
- SCO provides an excellent opportunity to create linkages and every country should try to simplify trade procedures and work for a free trade agreement.
Pakistan should learn from China as it has many issues with India but still, its trade volume is approaching a staggering $100 billion. Despite massive differences, China has developed trade linkages with Taiwan as well.
Furthermore, Pakistan should study the governance and market structure of all SCO member countries. A comprehensive understanding of governance and market structures will develop a prudent policy for Pakistan.