Turkey and Pakistan's mutually beneficial economic alliance

Published 24.07.2019 00:50
President Recep Tayyip Erdoğan R and Pakistan's Prime Minister Imran Khan pose for the media before their meeting on bilateral relations, Ankara, Jan. 4, 2019.
President Recep Tayyip Erdoğan (R) and Pakistan's Prime Minister Imran Khan pose for the media before their meeting on bilateral relations, Ankara, Jan. 4, 2019.

For 70 years and counting, Pakistan and Turkey have enjoyed a relationship that is deeply rooted in mutual respect, harmony and faith. A country like Turkey and its alliance with Pakistan, which was formed on the basis of ideology, is crucial not only for the peace of South Asia but also for Europe and the Gulf.

The bond between the two people dates back to 1923, when the subcontinent stood beside Turkey to save it from downfall. Both have faced issues of similar nature since then, for instance, the threat to Pakistan from the Tehrik-e-Taliban Pakistan (TTP) and Daesh and for Turkey from the PKK and its affiliates.

The two have stood together on multiple platforms and have engaged against terrorism with mutually beneficial military drills. Economic cooperation between the two has also been highly important and always will be.

This nearly century-old relationship has the potential of developing into an economic alliance that the world will look up to. Turkey can enter Pakistan investing in the government's housing scheme, providing support in irrigation, food processing and increasing halal meat and agricultural productivity.

Turkey can get economic benefits from its brother country Pakistan by investing in solar energy in Pakistan, which shows increasing demand in the country. In the recent past, the Pakistani prime minister constituted an eight-member ministerial committee to look into the Strategic Economic Framework (SEF) arrangement with Turkey.

Economic cooperation

The two countries have, and can enhance, educational exchanges as well as exchanges of the workforce for better training and exposure of the two. The unending economic support can also benefit from tourism exchanges, expanding its present avenues like the Pakistan Turkish Tourism Council (PTTC). Turkey has already been added to the visa-free travel list in Pakistan. Commercial ties between the two are likely to enhance in the coming years.

The core focus of economic cooperation between the two countries has been on defense and security. With efforts from both sides, an increase in Turkey's export to Pakistan increased from $155 million in 2008 to $352 million in 2017, and the future seems brighter.

Both countries are part of the Economic Cooperation Organization (ECO) and the D8 Organization for Economic Cooperation. A Pak-Turk Military Consultative Group (MSG), established in 1988, has witnessed 60 agreements for defense cooperation under its mechanism and has thus turned into a High-Level Strategic Cooperation Council.

The present Pakistani government has invited the Turkish Chamber of Commerce to promote health, surveillance and agricultural exchanges. Turkish investors' fear of corruption in Pakistan has been answered with the present clean and clear government of Pakistan under Imran Khan, who is famous for his anti-corruption stance.

Moreover, Pakistani courts have denounced the Fetullah Gülen-led Gülenist Terror Group's (FETÖ) outfits, which is again a welcome gesture from Pakistan.

Pakistani-Turkish economic ties stand stable and indestructible because of the strong bonds on all other fronts. When Pakistan was placed on a terrorist financing "grey list" by the Financial Action Task Force in February, Turkey was the only country to oppose the move. It also proved to be the best ally of Pakistan by opposing New Delhi's membership to the Nuclear Suppliers Group.

Both countries share much and have always supported each other in hard times. Turkey has always stood beside Pakistan and on the issue of Kashmir on all possible forums. Pakistan has supported the Turkish stance on tensions with Greece and Cyprus, for instance, during the recent rise in tensions between Northern Cyprus and Turkey on the utilization of the gas reserves of the former territory. The stance on international conflict issues and the alliance or antagonism of different countries has also played a role in strengthening the relationship.

The strong bond both countries enjoy has surfaced in the form of continuous and strengthening economic ties in all eras. The aim to set up a shared business council to increase cooperation in trade and economic development under the government of Imran Khan in Pakistan speaks volumes.

The extensive commercial sphere is expected to be enjoyed by investors of both the countries in the coming years more than ever before. The economic and strategic ups and downs in both countries have made them both realize that they can utilize their good and bad experiences to develop an economic alliance that is unbreakable.

Partnership in hard times

The United States unknowingly has played a part to bring both the nations even closer. Turkey and Pakistan have received an influx of refugees because of the proxy wars they had to engage in because of their alliance with the U.S. at one time or another in Syria and Afghanistan, respectively.

It was in 1952 when Turkey became a part of NATO and in 1954 when Pakistan started receiving military aid from the U.S. However, the U.S. alliance with both the countries did not work out smoothly and later, the U.S. stance on Cyprus made the relations between the U.S. and Turkey sour, while Pakistan-U.S. relations became doubtful during the Indo-Pakistani War of 1965.

It not only pushed Turkey toward Russia and Pakistan toward China, but both countries formed the Regional Cooperation for Development with Iran in 1964. This cooperation paved the way of many mutually beneficial platforms for the two countries.

The war on terror and the post-9/11 period, when both the countries sided with the U.S., also brought the two countries on the same page and thus became a source of expansion between their bilateral relations. The High-Level Cooperation Council set up in 2009 was proof of the strong defense ties between the two countries.

Washington has initiated an era when the Turkish lira faced a drop due to American tariffs on Turkish imports imposed by the Donald Trump administration and on the other side, the Pakistani rupee nosedived because of issues with U.S. aid.

In that scenario, Pakistan and Turkey have boosted their security relationship with each other. The aim of Turkey in achieving self-sufficiency in its military equipment by 2023 is a move that will ease the scenario for Pakistan, where it faces problems with imports of arms from Europe and the U.S. At the moment Turkey is the second-largest arms supplier to Pakistan after China, liberating Pakistan from U.S. dependence.

Onward to a positive future

The present government of Pakistan has initiated a new era of ties by working on the proposals of the Strategic Economic Framework (SEF), covering cooperation in agriculture, low-cost housing, tourism, culture, investment, industry, automobile, banking and finance, health and pharmaceuticals, transport, communications, education, vocational training, aviation, water resource development, energy, power, science, technology, information communication technology, development planning, postal services and the implementation of small-scale projects.

The bilateral trade volume that stands at $900 million is aimed to be increased fivefold by this work, which has been accelerated by Imran Khan's visit to Turkey in the first month of 2019. Connectivity via railways, road networks, airlines and sea routes will play a significant role in bringing this agreement to life.

Memorandums of understanding signed between the two countries on the Punjab Industrial Department program, the Turkey Cooperation Agency (TIKA), Pakistan Railways, the Turkish Logistics Organization, the Pakistan Standard Quality Control Authority and the Turkish Standards Institution in 2013 are some of the remarkable moves that were taken even before the SEF between the two countries.

Where both countries are collaborating on the military front, they have also started down the same path on the economic front. The China-Pakistan Economic Corridor (CPEC) can also be exploited by both countries, where Turkish investors can enter its decade-old ally's markets. Moreover, a free trade agreement (FTA) between the two countries, likely to be signed this year to fulfill the goals of the SEF, will introduce a new era for the outstanding relationship, which will lead both to new heights in mutual economic cooperation. A likely increase of $10 billion is expected if the two countries are able to sign this FTA.

* Analyst on international relations based in Islamabad, Pakistan

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