Any port in the storm

Earlier this column has been a proponent of regional connectivity and trade agreement (read “Trading with neighbours” published on July 26, 2017). So PM Nawaz Sharif’s visit to Maldives this week is considered a step in the right direction.

Amongst the smaller economies in the SAARC region in terms of international trade, it nevertheless has scope for some of Pakistan’s key export industries which include rice, medicaments, cement, and flour.

Talks of increasing trade between the two countries come at an opportune time, given Pakistan’s current crisis of trade deficit. Though the potential of trade between the two countries is nowhere near the optimistic $5 billion trade Pakistan is eyeing with Iran, it is nevertheless a port in the storm to increase Pakistan’s exports.

India’s exports to Maldives have grown steadily over the last decade while Pakistan’s exports to Maldives are negligible. This is despite India exporting commodities to Maldives that are Pakistan’s forte such as cereals, vegetables and fruits. India’s share in Maldives imports was 20 percent whereas the corresponding figure for Pakistan was less than 1 percent, in 2016.

In the past, Pakistan has not had a good experience with the signing of trade agreements (read “Trade deficit: Not a Failure of FTAs” published on July 24 2017).However, there is not much risk of a deficit when it comes to trade with Maldives. Since Maldives is a tourism based economy, it is almost entirely dependent on imports for survival, implying scope for Pakistan’s imports without a worsening of the current account deficit.

Another aspect where Pakistan can benefit from developing its relationship with Maldives is its expertise in tourism.