SCO Trade Links Essential for Economic Development in Pakistan

The Shanghai Cooperation Organization (SCO) is gradually leading to a shift in economic linkages and development of its member countries, and although it is a good opportunity for Pakistan, to be able to take advantage of this transition, Pakistan must first establish sustainable economic relations with the other member states within the SCO.

In recent years, the SCO has emerged as a regional forum that is focused on strengthening and building all its member states amid rapid global economic, social, and even diplomatic changes which have resulted in a shift of power change, with China leading at the forefront. Emerging as one of the strongest economic players, China is leading in its call for reforms to improve not only the global economic system but also the administrative system, accordingly.

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Shanghai Cooperation Organization (SCO), A Brief History:

Established as a means to resolve minor issues related to border management and security, the SCO later expanded and became the largest regional organization in terms of population and size with member states comprising of almost forty percent of the world’s population with a GDP of approximately, 24 billion USD. On the other hand, member states own twenty percent of the oil and forty-four percent of the gas reserves worldwide. If they are to further cooperation with the KSA (Saudi Arabia) and similar aspirants, they will increase not only in market size, but also in oil and gas reserves, as well as having two members of the UNSC (United Nations Security Council) among them.

China’s Role in Furthering SCO Links:

Back in 2004, the Chinese premier urged SCO member states to work on free trade agreements among the Shanghai Cooperation Organization. A year later, China presented 100 documents for further consideration. Then in 2018, it emphasized in a meeting of the Heads of States that trade procedures should be simplified to improve regional trade.

In 2019, the SCO Declaration asked member countries to step up their efforts once more in order to enhance economic cooperation and trade. Earlier this year, the SCO members approved a second development strategy in its meeting of the Heads of State. They also agreed to cooperate in trade and investment, while taking initiatives to involve the private sector and promoting investment cooperation.

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On the other hand, China is not only promoting economic cooperation and investment in technology, it is also supporting an enhancement of trade links within the Shanghai Cooperation Organization. Currently, one of the largest trading partners among all members of the SCO, China is proving to be a driving force for its economic potential, platforms and initiative to aid member countries.

How are SCO Trade Links Essential for Pakistan?

At the moment, Pakistan’s export and import figures within the Central Asian states in not ideal with exports to Uzbekistan amounting to almost 27.91 million USD, another 107.2 million USD in exports to Kazakhstan, nearly 32 million USD to Tajikistan and an approximate 10.6 millions USD to Kyrgyzstan, respectively. The situation on the imports front is not much different. Effectively, Pakistan’s imports from Uzbekistan amount to almost 32.3 million USD, another 1.9 million USD from Kazakhstan, nearly 202 million USD from Tajikistan, and an average of 309 million USD from Kyrgyzstan, respectively.

Despite its fall as a superpower in the past, Russia continues to play a decisive role in international politics and is considered a key player in Pakistan’s development as a significant member of the SCO. AS per international trade data, Pakistan’s exports to Russia account for almost 88 million USD while its imports are worth 885 million USD. Regardless of their turbulent history and Pakistan’s role in the fall of the Soviet Union, Russia and Pakistan with the help of the SCO and China are working to improve relations.

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Although, the situation is improving, Pakistan must continue to observe the market trends across SCO member states and establish departments that administer the markets and structures in place. Only a comprehensive understanding of the market and the governance structures of the SCO member states will help Pakistan is formulating a cohesive and objective policy for moving forward. On the other hand, Pakistan must also work on improving trade links via innovative ideas such as de-escalating tension with India by restoring trade between the neighboring countries.

The ongoing SCO Summit is a great opportunity for Pakistan to not only improve its trade links but also relations with India as Prime Minister Subrahmanyam Jaishankar attends in Islamabad.

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