ISLAMABAD: Pakistan’s minister for commerce, Naveed Qamar, has said the utilization of a barter trade model could help the cash-strapped South Asian nation increase its exports, Pakistani state media reported, after the federal cabinet approved the barter trade framework this week.
Barter trade is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.
Countries like Pakistan, which are undergoing financial crises, regularly engage in bartering as the framework allows them to manage trade deficits and reduce the amount of debt they incur.
“China was playing a significant role in the economic development of Pakistan,” the state-run APP news agency reported, citing a Pakistani commerce ministry statement.
“The barter trade model would inject new energy to the bilateral trade.”
The minister’s comments came after a meeting this week with a Chinese business delegation led by Hou Jianxin, the chairman of Shandong Xinxu Group Corporation.
Qamar assured full support of the Pakistani government to the Chinese companies to enhance the export volume of the country.
The South Asian country is currently undergoing one of its worst economic crises as its foreign exchange reserves have fallen to crucially low levels, barely enough to cover one month of imports.
To prevent the outflow of dollars, the country has imposed import bans on several items and raw materials which have, in turn, affected the country’s export sector.
While Pakistan awaits the release of a stalled loan tranche from the International Monetary Fund (IMF), the Industrial and Commercial Bank of China (ICBC) on Friday deposited a second installment of $500 million as part of a $1.3 billion facility into Pakistan’s central bank to help the cash-strapped country shore up its dwindling forex reserves.