Flogging a dead horse

Despite Foreign Minister Khawaja Asif asserting that Pakistan is in close contact with SAARC members to host the summit, it seems unlikely that it will be held soon. As September draws to an end with no date set it appears that another year will go by without Pakistan hosting the SAARC summit. And is it really that big a loss?

Given SAARC’s over three decade old history and lack of achievements, it does not appear to be a tool for promoting regional cooperation. Any progress made in trade, connectivity, tourism, or other interactions within SAARC members has happened independent of the regional bloc rather than because of it.

SAFTA could have been leveraged as trading bloc similar to ASEAN but its efficacy remains limited. Though India and Pakistan have been sworn enemies since inception, it has not prevented Pakistan from making India one of its top 10 trading partners. With over $2 billion worth of bilateral trade in FY17, the bulk of which consisted of imports from India, Pakistan trades more heavily with India than any other SAARC country.

It is not SAFTA that is driving Pakistan’s imports from India. Imports from India comprise of several produce grown in Pakistan such as potatoes, tomatoes and cotton, as well as goods that are on Pakistan’s sensitive list such as milk and cream products.

After India, Afghanistan is Pakistan’s biggest trading partner. Pakistan’s share in Afghanistan’s imports from the world has dwindled in recent years but it remains among the top five trading partners of Afghanistan. However, given the geographical location of Pakistan and Afghanistan, trade between the two countries would exist with or without SAFTA.

Bhutan, Maldives and Nepal are too small to have much of an impact on Pakistan’s international trade. Pakistan and Sri Lanka already have a trade agreement independent of SAFTA. Bangladesh and Pakistan have a similar export base with costs lower in Bangladesh. Thus there is not much room in SAFTA for Pakistan’s exports to grow unless Pakistan and India ties improve.

Much has been said in this column about the need to utilize SAFTA to increase Pakistan’s exports. History of successful trading blocs indicates that exports increase through regional connectivity. If SAFTA could be used effectively then Pakistan’s exports could rise significantly. However, to do so would require better political relations with India and that is not happening any time soon.