Economic Cooperation and Trade Relations Between Uzbekistan and Pakistan: Opportunities and Challenges

Abstract

The paper examines the possibilities and prospects of the economic collaboration and trade relations between Uzbekistan and Pakistan, paying attention to the exploration of historical relations, strategic connectivity and reforms processes in order to increase trade between the countries. The cultural relations and constitutional connections between the countries though has meant that the internal stability in Afghanistan, the costs of moving goods, as well as the lack of infrastructural development inhibit the trade potential between the two to hit its potential of $20 billion. The major initiatives on increasing the volume of trade and the growth of a particular industry are the preferential trade agreement that was signed in 2022 and the Uzbekistan-Afghanistan-Pakistan (UAP) Railway project, due to implementation challenges, such as complications of bureaucracy and the lack of engagement of stakeholders. This study uses a qualitative study design as a secondary source of data involving peer-reviewed materials to answer two research questions: the effects of the 2022 agreement on trade and the sectoral growth, and the issue of implementation of the UAP Railway, especially relating to local stakeholder involvement. The research findings point at the symbiosis of trade agreement and infrastructure matters, whereby the policies should be simplified, inclusive in funding, and integration is required to regional structures such as the Economic Cooperation Organization. The research bridges research gaps on empirical effects and stakeholder interactions by providing recommendations to enable the institution director to coordinate the actions of banks and other organizations, provide support to small and medium-sized enterprises, and manage geopolitical issues to exploit economic opportunities leading to information on the Uzbekistan-Pakistan economic integration and result in a more prosperous region.