LAHORE, Dec 26: Iranian President Seyed Mohammad Khatami has underscored the importance of enhancing regional economic and trade cooperation, saying that the proposed multi-billion dollar “project of laying a gas pipeline from Iran to India via Pakistan will bring peace and friendship in the region.”

Addressing a function organized by the Federation of Pakistan Chambers of Commerce & Industry on Wednesday, the president said: “Iran considers the (gas pipeline) project a major project on the national level and regards it as a symbol of strategic economic ties with Pakistan. The implementation of the project will benefit all the people of the region.”

Present on the occasion were Foreign Minister Khurshid Kasuri, Water and Power Minister Aftab Ahmad Sherpao and from Iranian side Foreign Minister Kamal Kharazi, Defence Minister Ali Shamkhani and Transport Minister Ali Khoram.

A number of prominent businessmen from both the countries also attended the reception.

The president said Iran was fully prepared to allocate all its resources for “developing economic infrastructure of the regional countries”. And within the framework of implementing this policy, he said, further “expansion of mutual relations with Pakistan is top priority.”

But, he cautioned, the “endeavours to boost mutual cooperation must not induce Iran and Pakistan to overlook the need to improve regional cooperation. “The recent developments in the region have explicitly demonstrated that regional cooperation is mandatory as well.”

“The Economic Cooperation Organization, the organization of Islamic Conference and the D-8 group — which have both Iran and Pakistan as their members — offer the two nations an appropriate opportunity to bolster regional economic cooperation. The economic situation of the Central Asian Republics (CARs), and the Caucasus, and the start of reconstruction process in friendly neighbouring Afghanistan have enhanced significance of our regional economic cooperation. Hence it is only proper for businessmen of our two states to cooperate with regard to these developments as well,” the president said.

“Both Iran and Pakistan could play a great role in the region because of their potential for transportation. We should improve our transportation network and remove obstacles hindering the smooth movement of goods along our routes to enable people of the two countries, and those of the region to benefit from the strategic position of Iran and Pakistan.”

Referring to the recent agreements reached at a recent session of the Joint Transportation Committee of the two nations, he said those might be of great significance for promoting transportation in both the countries. It would help them, specially Pakistan, to increase volume of their trade and exports to the CARs, as well as other regional countries.

Mr Khatami said as two most powerful states of the region, with “vast expanse of economic capabilities and adequate technological knowledge, Iran and Pakistan can begin cooperating in a number of diverse areas such as production and export of foodstuffs, textiles, and motor vehicles, by forging their capabilities and efforts for producing common products.”

He claimed that there exists a strong political will in Tehran and Islamabad for developing bilateral cooperation. “We are quite determined to boost our bilateral and multilateral economic ties. The businessmen must help the two governments advance in this direction.”

The president said the two countries and their businessmen had long been engaged in trade and this had prepared ground for working together in future to develop a new approach to increase business and economic cooperation. “I hope that this meeting will become a launching ground for development of economic relation between our states.

We can complement development of each other’s economies.” He also stressed the need for holding industrial exhibitions for strengthening economic relations between the two countries.

He also called for developing information and knowledge-based economy to replace old methods of transactions and commerce. “For this very reason, we’ve no choice but to build new structures and mechanisms as well as corresponding institutions according to the requirements of new type of economy emerging around the world.”

The president said Pakistan’s endeavour to develop its economy and transportation to attract foreign investment had prepared the ground for expanding bilateral cooperation with Iran.

He expressed his dismay over the existing trade volume of $300 million between the two countries, saying “it did not reflect the real capacity of trade between the two countries.”

The execution of certain bigger projects related to energy and fuel, construction of roads and preparation of various facilities for the purpose of expanding transit routes could “open gates” to new domains for economic cooperation between the two countries.

He said the “promotion of cooperation between private sectors of the two countries, and establishment of permanent ties between them could help boost bilateral commercial and business relations as well as pave the way for common investments in free commercial areas and border regions.”

“Joint investment in border areas will be of great consequence for the improvement of the financial state of the people of these areas, leading to the creation of small border markets and better living standards of their people,” he said.

The president insisted that the “victory of Islamic revolution had brought about certain political and cultural changes in Iran, helping it to attain industrial and economic self-reliance.”

He said the imposition of destructive, eight-year long war (by Iraq) on his country had also “led to its economic and industrial progress in various ways despite its damaged economic structure.”

Recounting the accomplishments of Iran in the recent years, he said his country had “reduced the government role in the economic affairs and promoted private sector.” Besides, he added, measures had been taken to remove the legal snags in the way of attracting foreign investment and implemented several economic reforms. Yet, he admitted, there were still certain capabilities and potentials which had not been exploited and which can only utilized with the assistance and cooperation.