Zafar Iqbal

The cultural, economic and trade relationship between Pakistan and Kazakhstan is based on their shared history, values, and interests. Pakistan and Kazakhstan have a common cultural heritage that dates back to the ancient Silk Road, which connected the cities and civilizations of both regions. Both countries have a majority Muslim population and a diversity of ethnic groups, languages, and traditions. Both countries also share a common vision of promoting peace, tolerance, and cooperation among different cultures and religions. Pakistan and Kazakhstan have various cultural exchanges and cooperation programs, such as the SCO Culture and Arts Festival, the SCO University, and the SCO Youth Council, which aim to foster mutual understanding and respect among the people of both countries. Pakistan and Kazakhstan also celebrate each other’s national days, cultural festivals, and religious occasions, such as the Independence Day, the Nauryz, and the Eid. Pakistan and Kazakhstan also support each other’s candidature for various international cultural forums and organizations, such as the UNESCO and the OIC.

Pakistan and Kazakhstan have a significant potential for economic cooperation and integration, as both countries have complementary resources, markets, and interests. Pakistan can offer Kazakhstan access to the warm waters of the Arabian Sea and the South Asian markets, while Kazakhstan can offer Pakistan access to the rich natural resources and the Eurasian markets. Both countries are also part of the Belt and Road Initiative (BRI), which aims to enhance connectivity and cooperation among the countries along the ancient Silk Road. Pakistan and Kazakhstan have signed several agreements and memoranda of understanding (MOUs) in various fields, such as trade, investment, energy, transportation, agriculture, science and technology, and tourism. Pakistan and Kazakhstan have also established various mechanisms and platforms for economic cooperation, such as the Joint Ministerial Commission, the Joint Business Council, and the Joint Working Group on Trade and Investment. However, the bilateral trade volume between Pakistan and Kazakhstan is still low, amounting to only $27.6 million in 2020. Both countries have expressed their desire and commitment to increase the trade volume to $1 billion by 2025, by removing the barriers and facilitating the trade and investment activities.

Pakistan and Kazakhstan have a favorable trade regime, as both countries are members of the WTO and have granted each other the most-favored-nation (MFN) status. Pakistan and Kazakhstan have also signed a Preferential Trade Agreement (PTA) in 2019, which provides tariff concessions on 79 items from Pakistan and 82 items from Kazakhstan. The PTA is expected to boost the bilateral trade and create new opportunities for the exporters and importers of both countries. Some of the major items of trade between Pakistan and Kazakhstan are textiles, leather, rice, fruits, vegetables, pharmaceuticals, chemicals, metals, machinery, and equipment. Pakistan and Kazakhstan are also exploring the possibilities of establishing direct air and rail links, as well as using the existing transit routes, such as the China-Pakistan Economic Corridor (CPEC) and the Trans-Afghan Railway, to enhance the trade connectivity and reduce the transportation costs and time.

Central Asia has emerged as a vital global investment hub and a bustling center for business and trade in recent years. Within this dynamic region, Kazakhstan stands out as the economic and commercial powerhouse. Since gaining independence in 1991, Kazakhstan has attracted a staggering USD 320 billion in investments, accounting for approximately 70% of the total foreign direct investment (FDI) flowing into Central Asia.

Active Collaboration Between Pakistan and Kazakhstan

Pakistan and Kazakhstan maintain active collaboration across various sectors, including trade, commerce, tourism, and culture. Pakistan’s Gowadar Port, with its warm shores, offers a crucial link for maritime trade, providing the most direct route between landlocked Kazakhstan and key regions like the Middle East, Africa, and the Far East.

Kazakhstan, with its abundant energy resources, serves as a potential source to meet Pakistan’s growing energy needs. Additionally, Kazakhstan presents a huge market for diverse Pakistani goods, including textiles, pharmaceuticals, agricultural products, and leather goods.

Trade Volume and Ambitious Targets

While the current trade volume between Pakistan and Kazakhstan stands at USD 138 million, it falls short of its substantial potential. Recognizing this, the Kazakh Ambassador to Pakistan, Yerzhan Kistafin, has set an ambitious target to elevate bilateral trade to an impressive milestone of USD 1 billion.

Significant Developments in Trade and Commerce

Several critical developments have facilitated trade and commerce between Pakistan and Kazakhstan:

• Air Corridor: A direct air corridor connecting Almaty and Lahore has been operational since July 2023, promoting travel and cargo transportation.
• New Trade Route: A new trade route through Afghanistan has been established, connecting Kazakhstan and Pakistan through a 4000-kilometer land route.
• Karakoram Highway: The Karakoram Highway, serving as an alternative route to Afghanistan, has been transformed into an all-weather passage through collaborative efforts.
• Kazakhstan-Pakistan Business Council: The inaugural gathering of the Kazakhstan-Pakistan Business Council aims to promote B2B connections and identify new areas for collaboration.

Expansion in Banking and Investment Opportunities

• Astana International Finance Center (AIFC): Collaboration is underway to establish an Islamic branch of a Pakistani bank at the AIFC, expanding financial services.
• Kazakh National Investment Operators: Representatives from “KazakhInvest” and “QazTrade” are actively exploring mutually beneficial investment opportunities.

Cultural Exchange and Shared Celebrations

• International Musical Festival “ALEM SAZ”: This cultural festival showcased Pakistani art, music, and cinema, fostering cultural understanding.
• Republic Day of Kazakhstan: The celebration of Kazakhstan’s Republic Day in Pakistan reflects the strong bond between the two nations.

Promising Future for Economic Cooperation

The expanding trade and business ties between Pakistan and Kazakhstan are driven by their unique strengths, historical connections, and the Belt and Road Initiative’s potential. The upcoming transit and trade agreement between the two nations promises to further enhance bilateral trade and bring them closer to the ambitious goal of USD 1 billion in annual trade volume. This collaborative effort signifies a strategic alignment of interests and a firm commitment to fostering economic cooperation between Pakistan and Kazakhstan.

Overall, Pakistan and Kazakhstan are well-positioned to build a thriving and mutually beneficial economic partnership. By leveraging their respective strengths and collaborating on key initiatives, they can achieve significant economic growth and prosperity for both nations.

Here are some additional points to consider:

• The role of technology and digitalization in facilitating trade and commerce.
• The importance of education and skill development in promoting economic growth.
• The need for sustainable development practices to ensure long-term economic prosperity.

By addressing these issues and continuing to work together, Pakistan and Kazakhstan can build a strong and lasting economic partnership for the benefit of their citizens and the region as a whole.

Please, subscribe to the YouTube channel of republicpolicy.com