Indonesia-Pakistan Economic And Commercial Cooperation

Introduction. Remarkable progress of Indonesia-Pakistan economic and commercial cooperation. Preferential Trade Agreement. Mutual apprehension of two largest Muslim states Massive potential of economic cooperation between the two nations. Conclusion.Indonesia and Pakistan have been enjoying unprecedented fraternal economic ties based on trust and reciprocal understanding. Bilateral trade between Pakistan and Indonesia is in tune of US $ 1 billion. Both countries offer their great market access to each other. Pakistan imports palm oil from Indonesia in huge quantity. Not only palm oil, Pakistan also gets coal, nuts, staple fibre of viscose, yarn, rubber, chemical, wooden pulp and paper. On the other side, Indonesia imports kinnow, seafood, frozen sardines, medical equipment, rice, wheat, carpets and textiles from Pakistan. In the historical perspective of Indonesia-Pakistan Economic and Commercial Cooperation, both countries look like twins.Historically, Pakistan and Indonesia have sound multilateral kinship in terms of economic cooperation and political development. This ideal brotherhood is credited to the renowned leaders, Quaid-e-Azam and Soekarno. Indonesian and Pakistani ties were consolidated by the signing of the Treaty of Friendship on March 3, 1951 in Jakarta. A trade pact was agreed upon between the two countries in 1959 in Karachi. By this agreement it was decided to promote trade and commerce between Indonesia and Pakistan. Both countries signed a pact on August 19, 1965 to collaborate with each other in shipping and technical cooperation. Indonesia and Pakistan agreed to exchange nuclear technology by an agreement concluded on April 19, 1980 at Jakarta. The Governments of two largest Muslim States of the world always came forward to promote joint ventures, private investment and liberalize trade in all productive sectors.A long-awaited Preferential Trade Agreement between the two thickly populated countries was signed in February, 2012 and came into effect from September 1, 2013. Preferential Trade Agreement was enforced to multiply the volume of trade between the two nations by three-fold. Both parties will grant their market access to each other at preferential rates. Pakistan has extended fifteen percent Margin of Preference over the standard tariff rate to Indonesian palm oil products. Similarly Indonesia has granted market access to Pakistani kinnow at 0%. PTA ensures that volume of trade between the two nations will go around US $ 4 billion in a few years. Preferential Trade Agreement has opened new trade doors to both nations. During 2004-05, the natural calamities posed great threats for the economy of both nations. But they always cooperated with each other through thick and thin. Both nations are venerable members of OIC, ASEAN, WTO, G-20 and D-8. Joint Venture Company of Indonesia and Pakistan reveals that the involvement of foreign exchange may also be reduced to a greater extent as most of the transactions are likely to be made on commodity exchange basis. The business community at both sides realizes Karachi to be gateway for Indonesian export products. No doubt, there exists more massive potential of economic cooperation between the two Muslim states. Indonesia is among top ten countries of the world in mining sector. Pakistan can use its expertise. Indonesias natural gas reserves are the worlds twelfth largest resources of gas. Pakistan needs bolster of Indonesia to meet its energy crises. Indonesia and Pakistan should ease visa policy. Both nations should promote interest-free Banking System jointly.Nawaz Sharif and Susilo Bambang Yudhoyono should increase the growth of volume of trade of both nations and resolve economic issues. They should realize that Bilateral Trade coordinates social, political and cultural views and refreshes religious values.

References:Rabbani, Prof.M.Ikram, Pakistan Affairs, (2007)http://en.wikipedia.org/wiki/Indonesia%E2%80%93Pakistan_relationsKhoso, Ghulam Murtaza, Pakistan-Indonesia, (September 2007).

Page 2Written by ASIABUTTSubmitted to The Consulate General of the Republic of Indonesia, Karachi