Mand-Pishin Border Market Set To Revitalize Pakistan-Iran Economic Ties

Mand-Pishin Border Market Set To Revitalize Pakistan-Iran Economic Ties
A profound transformation is currently underway in the symbiotic rapport between Pakistan and Iran. Rooted in historical linkages, religious ties, shared language, cultural affinities, and spiritual connections, the bilateral relationship between these two nations has long been characterized by cordiality and reciprocal admiration.

The Pakistan-Iran border has been officially designated as the "Border of Peace, Friendship, and Love" by the leadership of both nations. A plethora of border management mechanisms are currently operational, facilitating seamless operations between the two countries. Iran, with its expansive market, presents an auspicious avenue for Pakistan's export ventures and as a conduit for transit trade towards Azerbaijan, Türkiye, and onward to Europe via land routes.

Despite the presence of shared religious, cultural, and historical bonds, their association has faced hurdles due to various factors, including security concerns, divergent economic interests, and contrasting regional alignments. A noteworthy aspect of Iran-Pakistani relations is the occurrence of cross-border incursions by Pakistani militants, which have added to the tumultuous nature of their interaction.

In a remarkable turn of events, the current landscape is witnessing a resurgence of enthusiasm and a growing inclination toward collaboration between Pakistan and Iran. An outstanding development unfolded recently when Pakistani PM Shehbaz Sharif and the Iranian President, Seyed Ebrahim Raisi, jointly inaugurated the Mand-Pishin border market. This strategic initiative holds great significance as it aims to bolster the prospects of bilateral trade. Located in the remote village of Pashin, nestled within Pakistan's southwestern province of Baluchistan, this pioneering marketplace serves as the inaugural venture among a planned series of six installations along the Pakistan-Iran border. The establishment of these marketplaces is guided by the provisions outlined in a bilateral agreement inked by both nations back in 2012.

Historically, the intricate regional alignments have, at times, given rise to tensions within the bilateral association between Pakistan and Iran. Pakistan maintains strong ties with the Sunni powerhouse, Saudi Arabia, while simultaneously striving to uphold its relationship with predominantly Shiite Iran. Iran, disapproving of Pakistan's close alliances with Saudi Arabia, has expressed criticism, while Pakistan has voiced concerns over alleged Iranian support for militant groups operating within its borders. These contentious issues have intermittently strained their relations, necessitating adept diplomatic efforts to navigate and reconcile such complexities. However, the recent Saudi-Iran detente facilitated by China holds the prospect of breaking the deadlock and normalizing relations between the two nations.

Additionally, US sanctions and Iran's nuclear power program have had far-reaching effects, impacting Pakistan-Iran relations and the progress of the Iran-Pakistan gas pipeline project. Pakistan has faced delays in constructing its pipeline segment due to American pressure and sanctions on Iran. Iran has expressed a willingness to provide affordable supplies, addressing Pakistan's energy challenges. To underscore the urgency, Iran has fixed an $18 billion penalty if the project remains incomplete by March 2024.

With Pakistan grappling with energy scarcity, it has turned to costly imports of refined and crude oil, totaling $6.462 billion in 2020, and expensive LNG, amounting to $3.4 billion in 2021, predominantly from Qatar. Yet, Pakistan possesses a huge potential to import more affordable gas from Iran, thereby diminishing its dependence on costly LNG from Qatar. Key to seizing this opportunity is the prioritization of the construction of the IP gas pipeline.

During a meeting at the Shanghai Cooperation Summit (SCO) in September 2022, Iran reaffirmed its willingness to supply Pakistan with affordable gasoline, power, and natural gas, addressing Pakistan's worsening energy situation. This highlights the significance of enhancing cooperation and trade between the two countries. As of 2023, Pakistan-Iran trade has surged to an all-time high of $2 billion. signaling the growing economic ties and potential for further growth between the two nations.

Following the inauguration of the Mand-Pishin border market, the leadership of both sides has emphasized key sectors such as trade, investment, information technology, agriculture, and others, both sides resolved to advance cooperation, fostering mutually beneficial outcomes. In addition, the two leaders mutually agreed to explore the potential for collaboration in power transmission and further strengthen their cooperation in the solar energy sector. Pakistani Prime Minister Shehbaz Sharif also presented suggestions concerning the China-Pakistan Economic Corridor (CPEC), emphasizing the concerted efforts to implement the decisions made during the meeting.

The Mand-Pishin border market holds great potential to significantly boost trade activities in the surrounding regions with the construction of trade centers in the area. Notably, the joint inauguration of the trans-border Polan-Gabd electricity transmission line will also play a vital role in providing electricity to businesses and households. Specifically, it will facilitate the import of an additional 100 MW of electricity from Iran, a key step toward meeting the growing energy demands of the area.

In a nutshell, the Mand-Pishin border market will emerge as a dynamic center, catalyzing economic growth by fostering the expansion of trans-border trade, and engendering new opportunities for local enterprises between Iran and Pakistan. This joint inauguration exemplifies the resolute dedication of Iran and Pakistan to enhance the well-being of populations inhabited in the contiguous provinces of Sistan-o-Baluchestan in Iran and Balochistan in Pakistan, heralding a new era of collaboration and mutual progress.


The author is a Research Intern in the China-Pakistan Study Center at the Institute of Strategic Studies in Islamabad