Chabahar port deal a political show that will not be executed

By Zafar Bhutta / Creative: Talha Khan Published: December 18, 2016 12 SHARES Share Tweet Email Indian Prime Minister Narendra Modi, Iranian President Hassan Rouhani and Afghan President Ashraf Ghani hold hands in a show of solidarity after their trilateral meeting at the Saadabad Palace in Tehran, Iran, on May 23. PHOTO: REUTERS Indian Prime Minister Narendra Modi, Iranian President Hassan Rouhani and Afghan President Ashraf Ghani hold hands in a show of solidarity after their trilateral meeting at the Saadabad Palace in Tehran, Iran, on May 23. PHOTO: REUTERS ISLAMABAD: Will Pakistan be able to sign free trade agreement (FTA) with Iran? It is a big question that is doing rounds among relevant circles as some key hurdles stand in the way of exploiting the huge potential of trade with Tehran. In an encouraging development, Iran has accepted Pakistan’s offer to join the China-Pakistan Economic Corridor (CPEC), paving the way for enhancing bilateral commerce. International sanctions on Iran against its nuclear programme, which were a major impediment to deepening the trade ties, have also been lifted earlier this year. Iran offers Pakistan to join Chabahar port deal According to an official of the Iranian embassy, Iran has floated its proposals for the FTA and it is waiting for the response of Pakistan government. He acknowledged that tariff structures in Iran were high and unstable, but said free trade would bring down tariffs and duties as well as improve the trade volume. “If Iran joins CPEC, it will help enhance bilateral trade and even clear the way for supply of Pakistani goods to Central Asian states and Russia,” he said. The official called the Chabahar port deal among India, Iran and Afghanistan a political show in the region, which was not expected to be implemented. He revealed that India was not investing in the development of Iran’s Chabahar port, therefore, the deal would not prevent Tehran from joining CPEC. “Iran wants to work with Pakistan and its participation in CPEC will help improve relations further.” Hurdles to the FTA An official of the Ministry of Commerce, however, cautioned that Iran was not a member of the World Trade Organisation (WTO) and that made it tough to engage in trade with it. He pointed out that bilateral trade had come down because of sanctions in the past, but despite that Iran’s tariff structure was very complicated. “Iran imposes high tariffs on imports from around the world,” he said. Pakistan’s major export product could be textile but Iran has slapped 100% duty on textile goods. On leather garments, the duty is 120% whereas rice exports face 80% duty. In addition to these, citrus export to Iran is banned. According to the commerce ministry official, Iran increases import duties on different occasions with no stable tariff structure. In this scenario, it is hard to do business with the neighbour. Another major hurdle is the closure of entry gates on the border by Iran at 5pm. However, entry gates remain open on the Pakistan side for 24 hours a day. Pakistani traders are also required to pay load and road taxes in the Iranian territory. Chabahar port — the new game changer? Pakistan took up the matter with an Iranian delegation in August 2015, but they argued that road conditions in Iran were quite good, which was the reason behind the collection of load and road taxes. Being a WTO member, Pakistan can impose a maximum 25% import duty. This way, Iranian traders enjoy a level playing field but Pakistani traders encounter tax and tariff barriers in Iran. “Trade with Iran could not be increased unless it becomes a member of the WTO,” the ministry official remarked. Earlier, Iran was not willing to sign the FTA, but this time, it is expected to strike a deal. Some officials suggest that Delhi’s influence is quite effective in Iran, which will also be looking to tap the big market of India. Post-sanctions scenario After the lifting of sanctions earlier this year, Pakistan’s Ministry of Foreign Affairs endorsed plans to step up political and business relations with Iran. Bilateral ties had been at a standstill since 2011 due to tightening global restrictions. The two countries have been pushing for the past few months for an agreement between their central banks to streamline the payment mechanism. The State Bank of Pakistan (SBP), however, argued that though sanctions had been removed, Pakistani banks were mostly unable to find international banks that could process payments in respect of Iranian banks. To tackle this, the SBP is engaged in active coordination with the Central Bank of Iran in an attempt to establish a trade settlement mechanism to restore and encourage trade. In the transit trade arrangement, Iran provides the shortest route to Russia and Central Asian states as it is only 90 km away from Pakistan. Iran has already the infrastructure and it is ready to join CPEC. The positive developments come at a time when Afghanistan has no intention of signing a transit trade agreement with Pakistan if India is not allowed to transport its goods via Pakistan. The writer is a staff correspondent Published in The Express Tribune, December 19th, 2016.

Pakistan to hand over 2,281 acres of Gwadar’s free trade zone to Chinese

Letter of Invitation: I would be available to answer any queries regarding best suburbs to integrate socially, just to let you know 21 suburbs of South Australia which are red-flagged by Australian banks. I am happy to provide detail answers to any questions with reference to Property Investment, Subdivision, Development, Buying/ Selling Residential, Commercial, Rural Properties and Businesses. I am available in person (Tue/Thu at 1289 South Rd, St. Marys, SA 5042 12 to 5 p.m) or on cell to answer any questions, and concerns you have to decide about your Real Estate. (Cell: 0431 138 537, Email: Saqlain@Dukesrealestate.com) Click here to invest in South Australian Residential Commercial, Rural Properties, Schools & Businesses. By Peer Muhammad Published: November 10, 2015 351 SHARES Share Tweet Email After the formal handover of the free trade zone, all business affairs of the port will be carried out by Chinese authorities. PHOTO: REUTERS After the formal handover of the free trade zone, all business affairs of the port will be carried out by Chinese authorities. PHOTO: REUTERS ISLAMABAD: In a landmark ceremony, Pakistani authorities will formally hand over 2,281 acres of Gwadar Port’s free trade zone to the Chinese Oversees Ports Holding Company Ltd (COPHCL) on November 11 on a 43-year lease. The ceremony will be held in Gwadar on Wednesday and will be attended by the Chinese delegation headed by Vice Chairman of National Development and Reform Commission Wang Xiaodao, who has already arrived in Pakistan. Ripe for investment: Vast opportunities in AJK The Chinese delegation comprises of all top level officials of the Chinese government and leaders of private companies. The Pakistani delegation will be led by Federal Minister for Planning, Development and Reform Ahsan Iqbal. The event will also be attended by Balochistan Chief Minister Dr Abdul Malik and Federal Minister for Ports and Shipping Kamran Michal, said a senior official of the ministry.The government has already declared Gwadar port a free trade zone for the next 23 years. The officer said that in this regard, a high level meeting of both authorities will be held in Karachi on November 12 to complete the formalities. COPHCL will execute the port’s affairs through its three main companies including Gwadar International Terminal (GIT), Gwadar Marine Services Ltd and Gwadar Freezone Company Ltd. Grand scheme: Govt to spend Rs26b on Gwadar airport upgrade GIT will also be responsible for the port’s operations by handling business related matters. Gwadar Marine Service Ltd, will look at the port’s operation by providing allied services and Gwadar Freezone Company will look after affairs of the free zone area by developing and providing allied facilities to the investment companies in the free zone area. After the formal handover of the free trade zone, all business affairs of the port will be carried out by Chinese authorities. Grand scheme: Govt to spend Rs26b on Gwadar airport upgrade The officer said that Pakistan has delivered its end of the bargain and now it is upto the Chinese authorities to show their commitment. Additionally, during the ceremony, inauguration of some projects will also be held including inauguration of school and health centres established by the Chinese in Gwadar. The scheme is part of the China-Pakistan Economic Corridor (CPEC), an ambitious $46 billion investment plan linking western China to the Arabian Sea with infrastructure, energy and transport projects. Three days in Gwadar Pakistan is also raising a special security force of between 10,000 and 25,000 men to protect the port. Earlier, Abdul Razzaq Durrani, the director general of Gwadar Port Authority, had said that land acquisition to build the economic zone had cost the Balochistan government around $62 million. Gwadar port was built in 2007 with technical help from Beijing as well as Chinese financial assistance of some $248 million. Published in The Express Tribune, November 10th, 2015. Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Gunmen kill 22 bus passengers in Pakistan attack

Sat, May 30 07:19 AM EDT image By Gul Yousufzai QUETTA, Pakistan (Reuters) - Gunmen disguised as members of the Pakistani security forces killed at least 22 passengers on Friday night after forcing them off buses traveling from the western city of Quetta to Karachi on the southern coast, officials said. The assault in the province of Baluchistan occurred in the town of Mastung, around 40 km (25 miles) south of Quetta. "Fifteen to 20 armed men in three pickup trucks and wearing security uniforms kidnapped around 35 passengers," Sarfaraz Bugti, Baluchistan's home minister, told Reuters. He said the bodies of 22 passengers were later found around two km away from the main Quetta-Karachi highway in foothills. Seven of the assailants have been killed in an operation involving hundreds of soldiers and police, he added. The circumstances of the passengers' deaths could not immediately be established and the motives of the assailants were unclear. The attack will be a concern for the government of Prime Minister Nawaz Sharif because it raises further questions about the feasibility of a new economic corridor Pakistan wants to build with billions of dollars of Chinese investment. The much-vaunted project, announced when Chinese President Xi Jinping visited Pakistan in April, envisages an eastern and western route, with the latter passing from Gwadar port in the south through Quetta and beyond. RELATIVES PROTEST Separatists have been waging an insurgency in Baluchistan, of which Quetta is the capital, for more than a decade. They are demanding an end to what they see as the exploitation of their resources by people from other parts of Pakistan. Islamist militants also regularly target civilians and the security forces, and earlier this month at least 43 commuters were killed on a bus in Karachi by a group that has declared allegiance to Islamic State. All of the victims in that attack were Ismailis from Pakistan's minority Shi'ite community, but one security official said the Mastung attack did not appear to be sectarian. Officials in Mastung said a major operation involving four helicopter gunships and around 500 security personnel on the ground was underway to hunt down the remaining assailants believed to be hiding in mountainous terrain. "The kidnappers and terrorists are surrounded by security forces," Bugti said. In Quetta, where the bodies of the slain passengers were taken, hundreds of people gathered outside the governor's house and staged a protest over the lack of security in Baluchistan. Among the demonstrators were relatives of 16 of the victims, whose bodies were laid out in a line wrapped in cloth. (Writing by Mike Collett-White; Editing by Angus MacSwan)