Future commitments


Mar 07 - 13, 2005



The Prime Minister, Shaukat Aziz visit to Iran last week seems to have produced important and fruitful results for the two countries.

On return from Iran he had meetings with the President of Eriteria, and held meetings with Chinese delegation and NWFP ministers. He also presided over the ECNEC meeting and launching of Pakistan Millennium Development Goals (PMDG) report 2004.

During a return journey to Pakistan, Prime Minister told the accompanying newsmen on board that his visit to Iran was highly fruitful. Pakistan expressed its desire for resolve of Iran's nuclear stand with the US. "We wish the dispute be resolved justly and peacefully," PM observed.

The Prime Minister had already opposed a military solution to Iran's nuclear programme and hoped the nuclear controversy would be resolved under the EU initiative of providing economic and regional stability in the region.

He reiterated that Iran was capable of handling the situation. During his visit, Shaukat Aziz met senior Iranian leaders including President Mohammad Khatami, Vice President Dr. Mohammad Reza Aref, Supreme Leader Ayatollah Ali Khemenai and Expediency Council Chairman, Akbar Hashemi Rafsanjani.

Both sides discussed bilateral trade and investment, the transnational gas pipeline, the regional security situation, challenges faced by the Muslim community and restructuring of the Organization of Islamic Conference (OIC). Shaukat Aziz said the peaceful resolution of Iran's nuclear controversy would decrease tension in the region.

The Prime Minister said the energy ministers of Pakistan, Iran and India would meet in Islamabad next month to discuss the proposed gas pipeline project. The meeting might be arranged on the sidelines of the SAARC energy ministers' conference to be held in mid-March. He said India had earlier set some preconditions for the project, but later decided to come on board without any precondition. He said gas linkages would create inter-dependency among neighbour's states, ensuring a peaceful atmosphere and an increase in economic relations among them. Shaukat Aziz said he had called the project a "peace pipeline" because pipeline diplomacy could help maintain an atmosphere of peace and stability in the region. He said Pakistan also had the options of buying gas from Turkmenistan and Qatar transnationally and through under-sea pipelines respectively.

He said Iran and Pakistan had agreed to restructure and reinvigorate the Economic Cooperation Organization (ECO) and OIC. The Muslim community faced multiple challenges that could be addressed by using the OIC platform, he said adding that all OIC member states wanted to make the conference a vibrant organization.

Pakistan and Iran singed four agreements including memorandum of understandings that would further boost their economic and trade ties. The premier, who was on a three-day visit to Iran and presence of Iranian First Vice-President, Dr Reza Aref, signified the importance of the accords. The growth of investment and trade between the two countries would benefit their economies and, as the agreements indicate, the scope to further widen bilateral cooperation in these fields appears quite substantial. However, a key issue has been that of gas pipeline on which it has been decided that the energy ministers would meet to discuss it sometime in March this year.



The most important agreement relates to amend the Preferential Trade Agreement (PTA) that would help the tariff regime to improve bilateral trade between Pakistan and Iran from its existing level of $400 million to $ one billion annually. Another agreement was singed to establish a joint investment company with a $25 million paid-up capital and it will become operational within ninety days. It would promote investment and broaden areas of economic cooperation. According to yet another agreement, Pakistan would get enhanced support from Iran for the export of its fruits. Both countries signed a memorandum of understandings (MoU) that would enable them to follow up the decisions taken to boost mutual economic cooperation. The decision to hold the meeting of Pak-Iran Joint Economic Commission twice a year would be quite helpful in this regard.

It has also been decided that Iran would provide $200 million credit to Pakistan for the development of infrastructure, mainly for the railways and road network. Iran has also agreed to enhance electric supply from 20MW to 50MW for Balochistan. Iran's Vice-President has rightly pointed out that the signing of the agreements underlined the desire on the part for the two countries to continue expanding their economic and trade ties adding that it is for the officials and the business leaders to benefit from these decisions and agreements. Prime Minister Shaukat Aziz described his visit as useful and successful which should pave the way for accelerated promotion of bilateral economic cooperation.

In this meeting with Eriterian President the Prime Minister discussed and approved various measures to expand trade and economic relation between the two countries, while talking to Chinese delegation led by Deputy Minister for Commerce, Shaukat Aziz invited them to participate in the privatization process and invest in water, infrastructure, human development, fisheries and energy sectors. By expanding trade and economic cooperation, we will strengthen our existing close political and friendly relations, he observed. The economies of Pakistan and China were rapidly growing and conclusion of an early FTA will open new avenues for the private sector as Pakistan is a free economy where any foreigner could operate and run business at par with local entrepreneurs, he added.

Pakistan is also setting up industrial parks at various places where Chinese investors are welcome to establish industrial enterprises, he added. The Prime Minister referred to various economic reforms carried out by his government and said "history will record that these were one of the most meaningful reforms undertake.

Prime Minister told the gathering at the launching of PMDG report 2004 that the confidence building measures with India have boosted investment in the country and positive impact of economic growth have started to reach to the common man. Improved internal security and confidence building measures initiated with our neighbours have encouraged local and foreign inventors. We can't change the past, but the government of the day in Pakistan was committed to the future.