ISLAMABAD:
After successfully hosting the Shanghai Cooperation Organization (SCO) summit, Pakistan is actively seeking membership in BRICS, the influential group of emerging economies.
Originally formed by Brazil, Russia, India, China, and South Africa, BRICS has recently welcomed key Middle Eastern countries, including Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE.
While the SCO and BRICS share similarities, particularly the prominent roles of China, Russia, and India, they differ in focus. The SCO, primarily a Eurasian organization, was established with a security emphasis but is gradually expanding its agenda to include economic collaboration. In contrast, BRICS began as an economic alliance to counter Western dominance in global institutions and is now positioning itself for a more significant political influence in the changing global landscape.
Pakistan’s strategic decision to join the SCO highlights its aim to assert its independence on the world stage, and its potential pursuit of BRICS membership raises the critical question: Can it achieve meaningful economic benefits from these influential groups?
Historically, Pakistan has struggled to gain economic advantages from its involvement in multilateral organizations. For instance, as a founding member of the General Agreement on Tariffs and Trade (GATT) in 1948, which is widely recognized for reducing trade barriers and enhancing global integration, Pakistan failed to capitalize on its membership due to limited engagement.
Later, when GATT evolved into the World Trade Organization (WTO) in 1995, Pakistan again became a founding member but showed little commitment to reforming its trade policies to meet international standards. In contrast, other developing nations, like China and Vietnam, significantly increased their international trade and integration by aligning their domestic policies with global commitments.
Regionally, Pakistan’s cautious approach mirrors this trend. Following the establishment of the South Asian Free Trade Area (SAFTA) at the 12th SAARC Summit in Islamabad in 2004, there were high hopes for enhancing regional trade. However, while countries like India and Bangladesh achieved over a 600% increase in bilateral trade—from $2.5 billion in 2005 to $16 billion in 2023—Pakistan’s trade volume with India plummeted by two-thirds, remaining around $3 billion.
To pursue economic gains, Pakistan must critically evaluate its inward-looking stance.
The recent SCO declaration adopted in Islamabad acknowledged significant shifts in the global economy, particularly in areas like information technology, digitalization, artificial intelligence, and e-commerce. Member states expressed their intent to enhance cooperation in these fields, especially in combating protectionist trade measures. However, Pakistan faces challenges in this regard; many SCO members are actively participating in WTO negotiations concerning these areas, while Pakistan remains on the sidelines.
Notably, Pakistan has yet to sign the WTO’s Information Technology Agreement, established in 1997, which has become one of the organization’s most successful plurilateral agreements. All SCO members within the WTO are already part of this agreement, allowing them to build on it more effectively.
The notion that these organizations might shift from trading in US dollars to regional currencies, potentially alleviating Pakistan’s dollar shortage, seems unlikely given the current circumstances.
If Pakistan seeks to improve its economic situation, it should focus on joining organizations that prioritize geo-economics rather than geopolitics. Pursuing membership in the Regional Comprehensive Economic Partnership (RCEP)—a key hub for international trade and prosperity—would be a strategic move, especially since it is led by China and widely supported by Asia-Pacific nations.
The essential lesson from these observations is that simply joining regional or multilateral blocs does not guarantee economic benefits. For Pakistan to achieve genuine economic gains, it must move away from its current obstructive policies.
Leveraging its strategic geographic location could facilitate transit trade among SCO members. Additionally, Pakistan needs to shed its reputation as one of the world’s most protectionist countries and transition to a forward-thinking, globally integrated economy.
To fully benefit from modern technologies, Pakistan should actively participate in international agreements related to information technology, digital trade, and e-commerce. Without these proactive measures, joining new blocs may yield minimal results rather than significant economic advantages.
The writer is a Senior Fellow at PIDE and has previously served as Pakistan’s ambassador to the WTO and as the FAO representative to the United Nations in Geneva.
NEWS DESK
PRESS UPDATE