FROM ANTIQUITY TO PROSPERITY: PAKISTAN’S HISTORIC TIES AND DIPLOMATIC RELATIONS WITH CENTRAL ASIA AND THE PROSPECTS FOR THE ECONOMIC POWERHOUSE-UZBEKISTAN

Abstract

The region of Central Asia (CA) is important for Pakistan due to historical relations, economic ties, trade complementarity and above all sharing of close proximity to each other. This puts Pakistan into a geographical perspective, which makes it, at once a member of the CA as well as Southeast Asia. Indus and Oxus came into close contact from 2500 to 2400 BC and kept a very close relationship till 1500 BC. Pakistan may access the CA through China as Uzbekistan has agreed to become part of the Quadrilateral Traffic in Transit Agreement (QTTA) already signed among Pakistan, China, Kyrgyzstan and Kazakhstan. The article also shows strong trade complementarity between the economies of Pakistan and CA countries. Pakistan was one of the first countries to recognize Uzbekistan's independence and establish diplomatic relations in 1991. China's Belt and Road Initiative (BRI) has a significant impact on Uzbekistan, which stands out as the value of the project has big importance for Uzbekistan’s economy. Uzbekistan domestic production increased by about 15% from US $ 50 billion in 2018 to US $ 58 billion by 2019, while Uzbek GDP per capita increased by 13%, from US $ 1,529 went to US $ 1,725 when the dollar went up. Inflation fell from 27.5% in 2018 to 19.2% in 2019. Pakistan and Uzbekistan have signed more than 70 different agreements, since 1992, out of which 26 are related to trade and commerce. In 2019 Pakistan and Uzbekistan had a total trade volume of US $ 28 Million approximately. However, Pakistan can further enhance it and there is sizeable potential for increase in this trade volume. The total trade potential of items amounts to US$ 424 Million, which is 15 times more than what Pakistan traded with this country in 2019. Pakistan needs to work on a number of policy problems to profit from this potential