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Print Print 2023-06-03

Afghanistan, Iran, Russia: Country outlines process for barter trade

  • Govt tries to manage balance of payments crisis amid record inflation
Published June 3, 2023

KARACHI: Pakistan has passed a special order to allow barter trade with Afghanistan, Iran and Russia for certain goods, including petroleum and natural gas, the Ministry of Commerce said on Friday.

Left with barely enough foreign exchange reserves to cover one month’s imports, Pakistan’s government is desperately trying to manage a balance of payments crisis and curb inflation after it hit a record of nearly 38% last month.

The government order, called the Business-to-business (B2B) Barter Trade Mechanism 2023 and dated June 1, lists goods that can be bartered. State and privately owned entities would need approval to participate in the trade mechanism.

Russia, Iran: B2B barter trade comes into effect

Sajid Amin, deputy director of the Sustainable Development Policy Institute, said Pakistan could gain particularly from oil and energy imports from Russia and Iran without adding to dollar demand. He added that the barter opportunity is important considering the dollar shortages the countries face.

“While it may not solve currency smuggling, particularly at the Afghanistan border, it can discourage smuggling of goods from Iran, such as diesel, and Afghanistan which is hurting the economy,” Amin added.

After Pakistan’s first purchase of discounted Russian oil in April, petroleum minister Musadik Malik told Reuters that Pakistan would only be buying crude, not refined products, under the deal.

There was no confirmation about how payment would be made but Malik said purchases could rise to 100,000 barrels per day (bpd) if the first transaction went smoothly.

Last year, Pakistan imported 154,000 bpd of crude oil, little changed from 2021, data from analytics firm Kpler showed.

In May, the Pakistan Petroleum Dealers Association complained that up to 35% of the diesel sold in Pakistan had been smuggled from Iran.

Pakistan’s government has also ordered a clampdown on smuggling of flour, wheat, sugar and fertiliser to Afghanistan.


Comments are closed.

Masud Canada Jun 03, 2023 07:32am
'....and if you save forex reserves you undermine growth'. How this does not apply to China and India ?
thumb_up Recommended (0)
Tulukan Mairandi Jun 03, 2023 08:43am
What does Pakistan have to offer other than mangoes, basmati (both substandard actually), illicit arms and suicide bombers?
thumb_up Recommended (0)
zeeshan Jun 03, 2023 10:18am
is smuggling k peeche kon hai? ye intni bari smuggling in borders pe kaisy hoti hai....border pe tou aapne fencing ki howi thi??? its institutionalized smuggling and the powerful are making billions on monthly basis!!
thumb_up Recommended (0)
Haq Jun 03, 2023 10:49am
A blessing of quiting IMF / US club, soon will be able to strengthened regional trade & relationship with Central Asian States via Afghanistan, as the region is full of natural resources & nearest port access of Gwadar & Karachi
thumb_up Recommended (0)
KU Jun 03, 2023 12:26pm
It's a good initiative, many countries are now dealing in barter trade. We can benefit from this because there are many goods and food that have the potential for export and trade through this system.
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KhanRA Jun 05, 2023 12:38am
@Haq, you’re living in a fever dream. These countries can trade via Turkey, and Afghanistan has no economy. You’re so proud that we turn our back on the richest investors so that we can become a transit country for Afghan dried fruit and suicide bombers. When will we understand that no country is prosperous without deep trading ties to the West?
thumb_up Recommended (0)
Awami Jun 05, 2023 10:10am
@Tulukan Mairandi, Three Cs, Chader, Chawal and Chamada are three big export items ( Textile, Rice and leather goods )
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Awami Jun 05, 2023 10:11am
@zeeshan, When you forbid free trade smuggling takes place.
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Awami Jun 05, 2023 10:15am
@Haq, It is always good to trade. But should take into account Afghanistan + Central asia economies and population are small compared to Pakistan. Iran, China and India should be markets, there can be export to them.
thumb_up Recommended (0)

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