The two-day official visit of Iranian Foreign
Minister to Pakistan last week has further strengthened the close ties
between two countries. Iranian guest Dr. Kmal Kharrazi, in his meeting
with the Prime Minister Shaukat Aziz, reviewed the progress on the
various decisions taken in the meeting of the joint Pakistan-Iran
Ministerial Commission last year.
Talking to the Iranian Foreign Minister, Prime
Minister Shaukat Aziz said that close ties between Iran and Pakistan
were a source of strength and peace in the region. He reiterated his
government efforts to expand bilateral relations specially in trade and
cover broad areas including cultural, social, political and economics.
He said that establishment of joint ventures and banks between the two
countries will further promote economic relations.
After two days of successful deliberations of the
joint Pak-Iran Ministerial Commission in Islamabad in March 2004, the
two countries had signed seven agreements and Memorandum of
Understanding for upgrading and setting up of the existing process of
economic cooperation and boost their trade and business relations. The
agreements included a joint investment company, avoidance of double
taxation, preferential trade, gas pipeline, banking and anti-smuggling
measure. The Pakistani delegation was led by Shaukat Aziz while Iranian
Minister for Transport Ahmed Khurram headed his team. Then, Prime
Minister, Mir Zafarullah Khan Jamali and the visiting first Vice
President of Iran Dr. Mohammad Raza Ared witnessed the signing ceremony.
The joint investment company was to be set up
initially with a net paid up capital of $ 25 million. The gas pipeline
project was approved for the bulk supply of gas from Iran to Pakistan
specially in the border areas and subsequently expanding it to connect
the Pakistan existing gas supply network. There are strong possibilities
that this project will be expanded to India which badly needs gas bulk
It was noted in the meeting that the existing level
of bilateral trade between the two countries in the region is only $350
million, as against which the potential to expand the trade flows was
estimated at not less than $3 to $4 billion. In this context it was
emphasized that a closer monitoring of the pace of implementation of the
new agreements would have to be given due attention with a view to
ensuring speedy progress towards the achievement of the desired goal of
enhancing bilateral trade and economic cooperation in other fields. It
is encouraging to note that Iran has indicated linking of the rail
facilities from Kirman to Zahidan which would make it possible for
Pakistan to connect the railway transport system up to Europe via the
Syrian town of Latakia. At the same time Pakistan would modernize and
upgrade its railway line from Quetta to Zahidan. The proposal to
establish a joint investment company is expected to initiate investment
activity on the basis of joint ventures between the private sectors of
the two countries. It may be mentioned here that similar joint venture
companies established with Libya, Kuwait and Oman are already operating
in Pakistan and contributing significantly to industrial development.
The proposal for adopting preferential tariff treatment of imports
between the two countries is a good development. The meeting of the
Joint Ministerial Commission of Pakistan and Iran reflected a new bid to
review the markedly slow pace of progress in expansion between the two
countries in spite of the fact that both are founder member of the
Economic Cooperation Organization.
In order to supplement its additional gas requirement
by 2009, Pakistan has decided to go ahead with the Pakistan-Iran gas
pipeline without waiting for Indian decision. They have decided to go
ahead with the project without Indian participation. India could join in
at a later stage.
Sources informed that Iranian government officials in
their meeting with Pakistani authorities have consented to bring the gas
pipeline from South Paras gasfield to Pakistan border. Pakistan would
now be required to lay pipeline from Pak-Iran border to Sadiqabad. The
gas could then be transmitted to the distribution system of both Sui
Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Pipeline
Limited (SSGC). Both Iran and Pakistan have the expertise and competence
to lay gas pipelines of top international quality. They might not
require any outside assistance in this regard though Asian Development
Bank (ADB) is coordinating with both countries for soft-term financial
Besides reviewing the progress of work on different
projects, Prime Minister Shaukat Aziz and Dr. Kamal Kharrazi discussed
the regional issues.
The Prime Minister briefed the Iranian Foreign
Minister about the composite dialogue between India and Pakistan. He
said Pakistan wants to discuss and resolve all issues in tandem
particularly the Jammu & Kashmir dispute, in line with aspirations
and wish of the people of Pakistan.
Iranian Foreign Minister appreciated Pakistan's
efforts for peace in the region. He stated that Iran was keen to further
develop its close ties with Pakistan particularly in the areas of the
trade and investment. He renewed invitation for Prime Minister to visit
Iran, which the Prime Minister Shaukat Aziz accepted to undertake in the
first quarter of 2005.