When the Economic Cooperation Organization (ECO) expanded its scope to include Central Asian Republics (CARs) in 1992, it sparked high hopes among the founder states: Iran, Pakistan, and Turkey. This expansion was seen as a potential catalyst for a new era of regional connectivity and trade cooperation. The inclusion of resource-rich Central Asian states, coupled with the absence of animosity among the member countries and the common cultural linkages, all indicated a promising future for economic cooperation. However, despite these positive signs, the ECO’s true potential remains unrealized, with a global trade volume of around 2% and an intra-regional trade volume of only 8.2% among ECO member countries.
Pakistan, one of the founders of ECO, has been actively working to strengthen trade, cultural, and political ties among the member states. Pakistan’s reliance on ECO partially stems from SAARC’s limited role in the region due to India’s agenda to isolate Pakistan diplomatically. Historically, Pakistan’s role in ECO has been pivotal, centred on the signing of free trade and transit trade agreements with countries like Turkey and Afghanistan and the construction of transport and energy infrastructure through bilateral and multilateral projects such as the Iran-Tehran-Islamabad (ITI) Corridor and the Pakistan Iran and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects.
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To meet its energy needs from CARs and provide them with the shortest land and sea routes to access the South Asian market and beyond, Pakistan has always emphasized the significance of ECO for regional integration and economic growth. Pakistan’s central place in the ECO is evidenced by the fact that the “Islamabad Declaration” and “Vision 2025,” two key documents outlining the vision and implementation agenda of the ECO, were agreed upon by the member states in the ECO’s 13th summit held in Pakistan.
Despite these efforts, Pakistan’s trade with ECO countries makes up only 3% of its external trade. Pakistan’s failure to complete projects like the Iran-Pakistan Gas Pipeline, fully operationalize the ITI corridor, and significantly boost its trade volume with ECO member states is due to factors such as its low industrial base, stagnant exports, political instability, and more. The deteriorating security situation in Afghanistan, economic sanctions on Iran, and the lack of ratification of the ECO Trade Agreement (ECOTA) 2003 by some states have also prevented Pakistan and other countries of the bloc from fully benefiting from enhanced multilateral cooperation.
Despite these challenges being chronic and multifaceted, Pakistan’s future role in the success of ECO is vital. The China-Pakistan Economic Corridor (CPEC)-related industrial and infrastructure development, along with the operationalization of Gwadar port in Balochistan, can significantly contribute to ECO members, particularly CARs and Afghanistan, reaching new trade markets and enhancing their trade linkages with other countries. Pakistan’s immense potential in tourism, with its archaeologically, religiously, and culturally significant sites, can further enhance people-to-people contacts among these states and be an excellent resource for earning foreign exchange reserves for Pakistan.
To play its role in ensuring the ECO realizes its potential, Pakistan will have to synchronize its national laws, policies, and customs procedures with the objectives of the ECO. Investments in technology, research, and development, as well as the reduction in tariff and non-tariff barriers to importing goods from ECO countries, are imperative for making Pakistan’s export goods competitive. From the ECO platform, Pakistan can serve as a bridge between Europe, the Middle East, Central Asia, and South Asia, provided it has a friendly investment environment and dynamic economic policies. Lastly, harmony and unity of vision between Pakistani businesses and the bureaucratic setup are crucial for implementing the government’s vision of increasing trade with ECO states.
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