LCCI lauds policy of barter trade with Afghanistan, Iran & Russia

LAHORE: The Lahore Chamber of Commerce and Industry Saturday appreciated the government’s recent policy decisions aimed at stimulating trade, stabilizing the economy and reducing business costs.

In a Statement, LCCI President Kashif Anwar, Senior Vice President Zafar Mahmood Ch, and Vice President Adnan Khalid Butt have expressed their support for two significant circulars issued by the State Bank of Pakistan (SBP) and the Ministry of Commerce.

In a remarkable move to enhance trade relations, reduce the cost of doing business, and stabilize the economy, the government has implemented a barter trade mechanism with Afghanistan, Iran, and Russia that permits state-owned enterprises and private sector entities to engage in the import and export of goods, including petroleum and natural gas.

The LCCI office-bearers said this includes the import of oil and energy from Russia, which not only contributes to reducing the cost of petroleum products but also strengthens energy security.

The LCCI officials informed that under the barter trade arrangement, the principle of “import followed by export” will be followed, ensuring that exports match the value of imported goods.

This innovative trade approach opens up opportunities for Pakistani businesses to export 26 identified goods, including milk, eggs, cereal, meat and fish products, fruits and vegetables, rice, salt, pharmaceutical products, leather apparel, footwear, steel, and sports goods to Afghanistan, Iran, and Russia.

Simultaneously, Pakistan can import a range of products, including fruits, vegetables, spices, minerals, coal, rubber items, cotton, pulses, wheat, petroleum oils, fertilizers, plastic and rubber articles, metals, chemicals, and textile machinery from these countries, they said, adding that implementation of this barter trade mechanism is expected to significantly reduce the cost of doing business and stabilize Pakistan’s economy.

It will increase foreign reserves, address the country’s balance of payments crisis, reduce the reliance on dollar transactions, and bring much-needed relief to businesses, thereby enhancing the overall business environment.

In another move and to further streamline cross-border transactions, reduce business costs, and maintain stability in foreign exchange rates, the SBP granted banks permission to acquire US dollars from the interbank market.

This short-term measure aims to alleviate pressure on exchange companies and enable customers to benefit from lower exchange rates. The permission granted to banks will remain valid until July 31.

Copyright Business Recorder, 2023