ISLAMABAD: The barter arrangement allowed by the Ministry of Commerce to businessmen will help Pakistan branch off a large chunk of its international trade and exchange from reliance on the dollar, says an expert.
The Ministry of Commerce has allowed for the barter of 26 commodity groups with Afghanistan, Iran and Russia under its Business-to-Business Barter Trade Mechanism, 2023, in effect ditching the dollar. The order has been issued to state-owned enterprises and private entities given that the private entities meet the eligibility requirements.
Commenting on the new facility, Dr Ijaz Ali, a research economist at the Centre for Business and Economic Research (CBER) Karachi, said that it will give much-needed support to the businessmen of Pakistan, especially in the border regions.
Those private entities which are registered with the Federal Board of Revenue (FBR) as “active taxpayers,” have subscribed to Pakistan Single Window System (PSW) and hold a valid import and export contract registered by Customs authorities in the Customs computerised system (WeBOC), will be eligible to make use of this facility.
“Barter trade will discourage illegal trade in dollar in the border regions as dollar will no longer be needed for international transactions with Iran, Afghanistan and Russia,” Dr Ijaz emphasised.
Commodities and goods that are allowed for B2B barter with Iran, Afghanistan and Russia under the new order include milk, cream, eggs, cereals, meat and fish, fruits and rice, bakery and confectionary items, and salt. They also include pharmaceutical products, essential oils, perfumes, cosmetics, toiletries, tanning and chemical products, plastic and rubber products, and leather and wood articles.
Similarly, garments, footwear, aluminium, iron, electrical and household, motorcycles, tractors, and surgical and sports goods are also included in the list of commodities which have been allowed by the Ministry of Commerce for barter with the said countries under the new order.
Dr Ijaz said that many countries in the world were mulling the prospect of leaving the dollar-dominated international trade regime.
“Pakistan with help from its international partners like China is also thinking hard and fast on how to restructure its economy for a sustainable future. De-dollarisation of the economy is one such step,” he said.
Ijaz also said that it is very promising to reduce reliance on dollar and start trading in goods for goods.
“This, however, will not be easy. Barter means that one must have some good to trade for another good,” he pointed out.
Ijaz said complications will arise when there are disagreements about the quality and value of the goods to be exchanged.
“This will inevitably create problems over the valuation of the products. But, all in all, a mechanism can still be evolved for the solution of such problems. And the potential gains from ending our reliance on the dollar are enormous if this vision is realised successfully,” he added. –INP
