Pakistan’s new finance minister, Ishaq Dar
Pakistan’s Finance Minister Ishaq Dar. Image Credit: Bloomberg

Islamabad: Pakistan and Uzbekistan have signed a $1 billion agreement aimed at enhancing bilateral trade, according to a statement by Pakistan’s Ministry of Economic Affairs.

The agreement was inked during the 8th meeting of the Pakistan-Uzbekistan Inter-governmental Commission on Trade-Economic and Scientific-Technical Cooperation (IGC) held in Tashkent on February 24.

Pakistan’s Finance Minister Ishaq Dar led the delegation tasked with negotiating the trade agreements. The IGC meeting was co-chaired by the Uzbek Minister of Investments, Industry, and Trade, Laziz Kudratov, and Pakistan’s Finance Minister Dar.

The most significant outcome of the IGC was the signing of a $1 billion trade agreement that will encourage the exchange of goods and services in different sectors and streamline trade processes. The two countries discussed cooperation in fields including trade and investment, banking, industries, energy, textile and agriculture, transportation, and communication, the ministry said. Ishaq Dar commended Uzbekistan’s increasing interest in strengthening the relationship and praised the progress achieved in the areas of transport and trade. He also welcomed the Uzbek side to explore opportunities in Pakistan in the fields of automobiles, information technology, and natural minerals.

Sustainable development and economic partnership

Both sides acknowledged the massive potential for investment cooperation and the significance of closer collaboration in promoting sustainable development through technology, innovation, and economic partnership. The IGC seeks to advance economic diversification, and sustainable growth, build supply chain resilience, and a robust regulatory environment. They agreed to convene the ninth meeting of the Pakistan-Uzbekistan Inter-governmental Commission next year in Pakistan.

For Pakistan, the investment prospects from this deal could prove crucial as the country faces a challenging balance of payment crisis, with foreign reserves plummeting to a level that could only cover three weeks of imports.

Pakistan’s finance minister confirmed this week that the country has received a new $700 million loan from China to help shore up its foreign exchange reserves.

Pakistan’s Prime Minister Shehbaz Sharif said that he is hopeful of reaching an agreement with the IMF after completing a series of measures including energy tariff hikes and new taxes. Pakistan desperately needs external financing to keep the economy afloat. The IMF loan revival would help unlock inflows from friendly countries and multilateral lenders.