The signing of a blueprint for a Preferential Trade Agreement between Pakistan and Turkey and the decision to set up a joint investment company that would institutionalize trade ties are long overdue steps. While the two countries have enjoyed excellent political and cultural relations for several decades now, what is surprising is that these historic ties have not translated into better trade and economic cooperation. For the past five years, trade between Pakistan and Turkey has hovered around $160 million, which is quite low by any standard.
Turkish investment in Pakistan has also been comparatively insignificant. This state of affairs cannot continue for too long as there is much that Pakistan and Turkey can do to widen their economic and trade cooperation for mutual benefit. There is tremendous potential for marketing Turkish products in Pakistan and vice versa. Keeping all these factors in mind, President Musharraf expressed the desire on his recent visit to Turkey to make it possible to enhance the volume of trade to one billion dollars in the next two years or so.
The Pakistan government also wants more investment from Turkish businessmen in the coming two years. This is indeed an ambitious plan that can only be fulfilled if the right conditions for it are created and maintained in both countries.
One significant way to give the needed impetus to businessmen in the two countries would be to ensure that any outstanding issues of difference or dispute are sorted out. One such matter is the dispute between the Pakistan government and a Turkish construction firm, Bayinder. This should be resolved in a manner that is acceptable to all the parties concerned.
The resolution of this dispute, which has dragged on for too long and which is linked to the construction of the Islamabad-Peshawar Motorway, would give Turkish investors the right signals about doing business in Pakistan. As things stand, several Turkish companies are said to be keen on investing and working in infrastructure sectors like in the Mangla Dam raising project. Turkish investment need not be restricted to these mega projects.
Turkish firms could also be persuaded to participate in the on-going privatization programme in Pakistan. Now that the groundwork has been laid for better economic cooperation, the next step should be the removal of irritants that have unduly added a negative dimension to what is essentially a very positive sense of goodwill and understanding between the two countries.