The Shanghai Cooperation Organization (SCO) has declared in its joint statement that member countries, which are geographically interconnected, must rapidly enhance their cooperation across various sectors.
With the largest population among regional organizations, the SCO holds significant importance. Pakistan shares ancient ties with the Central Asian countries in the SCO, further strengthened by religious bonds in some cases. These countries historically viewed Pakistan as a central ally, a position that is even more relevant today, particularly with Gwadar Port’s strategic role. The joint statement highlights that if these countries seek economic growth, industrial development, and the promotion of small industries, they must intensify trade relations and cooperation among themselves.
Amid shifting global economic and cooperative dynamics, it is evident that regional organizations are on the rise to foster trade and collaboration among countries within specific regions. Events such as the Gaza conflict, the recent war in Lebanon, and the conflict involving Israel and the Houthis have created disruptions in global maritime trade. Consequently, many countries have started focusing more on land-based trade with neighboring countries. The recent SCO meeting emphasized that Pakistan should quickly adapt its trade policies in line with the joint declaration’s objectives.
The world is transitioning from a “New World Order” to a multipolar system, signaled by the formation of various regional alliances. Pakistan’s foreign trade shows a clear impact from its foreign policy, and the extent of trade relations among SCO member countries will soon be measurable in trade statistics. Presently, Pakistan’s trade leans heavily towards the United States and Western nations, as seen in the recent Pakistan Bureau of Statistics (PBS) trade report.
This report, which includes vital export and import statistics, also details trade figures with Pakistan’s top twenty trading partners. A closer look at these twenty countries reveals that the bulk of Pakistan’s exports go to Europe and the United States, with China as the only significant SCO trading partner. For instance, Pakistan’s exports to the U.S. account for 17.25%, the U.K. for 6.6%, and Germany for 5%. Other European countries like the Netherlands, Spain, and Belgium also make up around 3-5% each.
Though Afghanistan is not yet an SCO member, it ranks eighth among Pakistan’s trade partners. Trade with Afghanistan has been declining, as it used to rank among the top three or four export destinations. Today, it accounts for only about 3.75% of Pakistan’s total exports. Meanwhile, Pakistan’s exports to China, the only major SCO member in this regard, constitute 8.39% of total exports—a significant increase from previous years, partly attributed to the China-Pakistan Economic Corridor (CPEC) agreement, efforts from the government and Pakistani traders, and a growing preference from China for Pakistani goods.
Recently, it was announced that a high-ranking Russian official is scheduled to visit Pakistan soon. Pakistan should strengthen trade relations and seek cooperation in various sectors with Russia. While a small-scale barter trade has already begun, there is potential for further expansion. Russia originally helped Pakistan establish its steel mills, and there is a need to reopen negotiations in this area.
Though Pakistan has started barter trade with Russia on a small scale, it is expected to increase. Pakistan has also held negotiations with several other SCO member countries, aiming to expand exports. This effort reflects an intent to reduce reliance solely on the United States and Europe and instead enhance trade with Central Asian countries, thus increasing Pakistan’s overall export volume.