|Robust economic growth and development is generally attributed to economic interconnectivity between distant states in the process of globalization. However, it is regional cooperation that is the real key to economic speed if the mandate is placed on facts and statistics. World trade is only a fraction of total world trade. When two states from different continents enter into a trade, it costs considerable sums in shipping and insurance. There is also the great threat that trade will be affected by conflicts, pandemics, tsunamis and relations between different states; the continuing negative ramifications of the conflict between Ukraine and Russia set the most important precedent. On the contrary, states can generate greater profits with minimal risk when they engage in trade with neighboring states. Pakistan must learn this as soon as possible.|
A recent investigation by a US State Department suggested that the state should refrain from transatlantic or transpacific trade and keep regional trade as its top priority. The survey concluded that members of the European Community and ASEAN benefited the most from regional trade, while Africa and South Asia were the worst in terms of regional cooperation and therefore economic development. This was also reflected in a recent article published in the Guardian in which laments were expressed over Britain’s decision on Brexit. Since Brexit, the United Kingdom has faced a decline in its economy. This is in order to renew ties with the EU.
Pakistan has a lesson in all of this.
The country has a long history of aggravated ties with its neighbors due to which much of its revenue goes wasted on trade expenditures with the West accompanied by threats and interventions. The divide is most apparent in its rivalry with India – now the 5th largest economy. Annual trade between Pakistan and India is only $2 billion, compared to $20 billion in daily trade between the United States and Canada. Both countries are big markets and have immense economic opportunities for each other. Increased economic activity can also strengthen friendly relations, which will help solve problems of security and distribution of water resources. However, the power imbalance with India can be disastrous for Pakistan, especially when Delhi has extremist Modi and RSS regimes in power. Europe relied too much on Russia for its gas supply and it turned out to be a strategic blunder. Ergo, Islamabad must play it very calculated with New Delhi.
Besides that, Iran is another missed opportunity for Pakistan. The state under pressure from Saudi Arabia, the United States and sectarian factions within it has never strengthened its ties with a country that was the first to accept it as an independent state. Iranian oil can be an excellent remedy for Pakistan’s fragile energy sector.
MOHAMED CHERIF OTHO,