Recent trip of President Asif Ali Zardari to Turkey has provided a glimpse of hope to the businessman community of Pakistan. The main agenda in this discussion was the resumption of the freight train from Islamabad to Istanbul. Both the leaders have agreed to upgrade the railway line connecting the two countries for 'GUL' train. This would reduce the traveling time between the two countries from eighteen days to nine. It would help both countries to achieve the target of 2 billion in bilateral trade.
The freight rate to turkey for air is Rs140 to Rs150 per kg and the consignment reaches its destination in three days. If someone wants to send goods by sea, it would cost him around Rs 70 to Rs80 per kg. So, if someone gets an order from turkey and if the buyer wants the merchandise in 15 days, he would have to transport the goods by air. We can imagine the impact this has to the price of the goods. When the project of ‘Gul’ train is materialized, the price of our goods will go down considerably.
This agreement might seem a minor step in consolidating relations between two countries. But in my view this is much more. Turkey offers a gateway to European market and the anticipation of turkey’s inclusion in European Union will definitely help the cause. In addition to this Pakistan is hoping to get the European Union’s aid package of suspension of import tariffs on Pakistani products like garments, cotton and ethanol. If Pakistan is able to persuade India to support this notion on world trade organization forum, we might be looking at an additional trade of $900 million to Europe via Turkey. The reduced transportation cost would help in competing with other countries in the international market. In return turkey gets access to south and central Asia including India and China, which is the most populated region on earth.
I realize that to make all this happen, a lot of things will have to go our way, but I if it does, We might just be able to get more than what we bargained for. For a change, our government would have something to be actually proud of.