akistan and Central Asia, bound by history, culture and geography, are poised for an economic renaissance. As the world seeks new markets and connections, this underexplored region holds immense promise. For Pakistan, recognising and embracing Central Asian Republics as economic partners not only makes economic sense, but is also a strategic imperative.

Pakistan’s strategic location provides a natural bridge between Central Asia and the Arabian Sea, connecting the landlocked region to global markets. Geography makes Pakistan a unique hub for trade between the East and the West.

The country’s proximity to the Middle East, Europe and Africa enhances its place as a regional hub. Dr Abid Qaiyum Suleri, executive director of the Sustainable Development Policy Institute, notes that “Pakistan’s geography is its greatest asset in becoming the region’s trade hub.”

Central Asia, comprising Kazakhstan, Uzbekistan, Tajikistan, Turkmenistan and Kyrgyzstan, holds significant economic potential and untapped energy reserves. The region, rich in natural resources, has awakened from a deep slumber. Pakistan’s connectivity with the Arabian Sea and its trade agreements with various countries make it an ideal partner for Central Asia. Central Asia’s strategic location makes it a crucial hub for trade between Europe and Asia. Several trade routes connect the region to global markets.

Recent international developments have made Pakistan an important economic player for the CARs. The ancient Silk Road, once a thriving artery of commerce, connected the East and the West. Today, Pakistan and Central Asia seek to revive this legacy.

Stronger economic ties with Central Asia have the potential to significantly enhance Pakistan’s regional influence, providing a counterbalance to existing geopolitical pressures and offering greater leverage in navigating complex regional dynamics.

The region’s growing consumer market, rich natural resources and strategic location make it an attractive destination for investors. According to the State Bank of Pakistan, Pakistan’s trade with Uzbekistan stood at $145 million in 2020-21, up from $45 million in 2015-16.

Trade with Kazakhstan and Kyrgyzstan has also shown growth, with trade volumes reaching $36 million and $4.5 million, respectively, in 2020-21. Trans-shipment of goods through Pakistan to Central Asia is also increasing, with 1.2 million tonnes of transit cargo handled for Afghanistan and Central Asia in 2020, up from 800,000 tonnes in 2015. The Karachi-Gwadar-Kyrgyzstan corridor transported 150,000 tonnes of goods in 2020, valued at $100 million.

The numbers indicate growth, but are far from the true potential. It is our responsibility to fully harness this potential through supportive policies and best practices at both government and logistics leadership levels. The enthusiasm among the CARs is overwhelming. A great opportunity is knocking at our door.

Major commodities traded between Pakistan and Central Asia include: textiles, cotton, oil and gas and agricultural products. According to a World Bank study, regional trade integration could boost Pakistan’s GDP by up to 1.7 percent. This could create millions of jobs and improve country’s economic condition. Diversification of trade will reduce dependence on traditional markets, fostering economic resilience. Strengthened ties will also promote regional integration, stability and cooperation.

Several trade routes connect Central Asia to global markets, each with its advantages and disadvantages. The CARs are linked with the world through the Russian route, Chinese route, Iranian corridor and Pakistani route through Afghanistan. A comparative analysis indicates that the Pakistani route is the most viable option for Central Asian trade, offering shorter distances, lower transit costs and upgraded infrastructure.

Trade with Central Asia has vast potential. It is estimated to exceed $5 billion over the next two years, with trans-shipment potential beyond 5-7 million tonnes. 

Pakistan’s strategic location, combined with CPEC investments, also makes it an attractive hub for regional trade. The Pakistani route, or the Southern Corridor, links Central Asia to the Arabian Sea through Pakistan and provides direct access to a large consumer market in South Asia. The only negative factor on this route is the uncertainty in Afghanistan.

Pakistan has signed several agreements and undertaken initiatives aimed at strengthening trade ties. These include the Pakistan-Uzbekistan Transit Trade Agreement (2021) and Preferential Trade Agreement (2022). The Quadrilateral Traffic in Transit Agreement (QTTA) among China, Pakistan, Kazakhstan and Kyrgyzstan will also boost trade. In recent years, several initiatives have been launched by Pakistan and the region to boost connectivity and trade. The CPEC and CASA-1,000 will play an important role.

Trade with Central Asia has huge potential. It is estimated to exceed $5 billion over the next two years, with a trans-shipment potential beyond 5-7 million tonnes. The import demand by CARs exceeds $18 billion annually. With the right focus and initiative, Pakistan can capitalise on this.

However, several challenges hinder the full realisation of this potential. Infrastructure deficiencies, including inadequate transportation networks, border crossings and logistics, increase transit costs and times. Complex trade regulations and bureaucratic hurdles discourage traders. Security concerns, including regional security issues and terrorism, affect trade confidence. Ease of visa processing for businessmen and drivers needs special attention.

Private sector players have played a vital role in enhancing trade relations between Pakistan and Central Asia. Companies like TCS (TCS Logistics) and NLC (National Logistics Cell) have pioneered logistics and transportation services, bridging the gap between Pakistan and Central Asia. TCS, Pakistan’s leading logistics and courier service provider, has established a strong presence in Central Asia.

With its extensive network and expertise, TCS facilitates trade by providing efficient transportation solutions, real-time tracking and monitoring and customised logistics services. In recent years, trans-shipment activities have doubled and Pakistani logistics firms are now operating in all countries of Central Asia. What was considered a peripheral logistic route a few years ago is now turning into a major undertaking, benefiting Pakistan as well as the CARs. Many Pakistani firms have established offices in the CARs, enhancing people-to-people contacts and building a strong ecosystem.

Enhanced trade between Pakistan and the CARs holds numerous benefits, including enhanced regional influence, economic growth, diversification of trade markets and increased access to Central Asian natural resources. For CARs, it will improve access to the Arabian Sea and global markets, reduced transit costs and times, increased trade volumes and economic growth.

To unlock their mutual trade potential, Pakistan and the CARs must address infrastructure deficiencies, simplify trade regulations and enhance security cooperation. On the Pakistani side, border crossings with Afghanistan need to be improved. By solving these challenges, Pakistan and the CARs can revive the Silk Road’s legacy and shape a brighter economic future. Ideally, all ‘stan’ states should work towards forming an economic union based on cultural, historical and religious affinity. However, this may take considerable time. Trade and logistics can be precursors in that direction.

The writer is an educationist, writer and a corporate host. She can be reached at Shahatariq67@gmail.com