SINCE Bangladesh’s independence in 1971, the economic trajectories of Pakistan and Bangladesh have significantly diverged. Despite their shared historical, cultural and political experiences as well as a common economic foundation, both nations have pursued distinct developmental paradigms. Emerging from the devastation of its war of liberation, Bangladesh has progressively transitioned towards a manufacturing and export-driven economy, particularly in the garments sector, while also sustaining its traditional industries. Pakistan, on the other hand, has maintained its stature as a pivotal commercial and industrial player in South Asia, underpinned by a diversified economic structure.
Recently, the Islamabad Chamber of Commerce & Industry (ICCI) hosted His Excellency Md. Iqbal Hussain Khan, the newly appointed Ambassador of Bangladesh to Pakistan, along with his delegation. The meeting exuded an implicit recognition of the necessity to transcend past grievances and initiate a renewed chapter of economic cooperation. The interaction resembled a long-overdue reunion of estranged brothers, symbolizing an earnest intent to foster bilateral engagement. A pivotal outcome of this discourse was the proposition of a structured delegation exchange aimed at strengthening economic ties. The ICCI has thus scheduled a reciprocal visit between the Dhaka Chamber of Commerce & Industry and ICCI, tentatively set for April 2025, to explore avenues of mutual interest.
This article explores Pakistan and Bangladesh’s economic divergence, sector-specific opportunities and the pivotal role of Chambers of Commerce in fostering reintegration. Before 1971, East Pakistan (now Bangladesh) played a key economic role, specializing in jute, fisheries and agriculture, while West Pakistan (now Pakistan) focused on heavy industry, textiles and commerce. However, economic disparities, resource inequities and political discord led to their separation. Today, both nations have a vital opportunity to restore their economic synergy. By bridging past gaps and leveraging trade partnerships, they can rejuvenate their historical economic bond and drive mutual growth through structured collaboration and strategic investments.
Post-independence, Bangladesh undertook economic reconstruction, initially relying on aid and agriculture, while Pakistan grappled with losing key sectors like jute and fisheries. This trade disruption led to financial difficulties, which both nations have since worked to overcome. Despite past differences, they hold significant potential for economic collaboration. Bangladesh, the world’s second-largest exporter of ready-made garments (RMG), derives 85% of its exports from this sector. Benefiting from the textile quota regime until 2004, it rapidly industrialized. Pakistani entrepreneurs have played a role in shaping Bangladesh’s garments industry, strengthening bilateral economic ties and highlighting opportunities for further cooperation.
Given Pakistan’s robust textile infrastructure, there exists substantial scope for collaboration in raw material supply, particularly in fabric and cotton. Strategic partnerships between Bangladeshi garment manufacturers and Pakistani textile firms could augment competitive advantages for both nations. In the agricultural and food processing sectors, Bangladesh excels in fisheries and jute production, whereas Pakistan demonstrates comparative advantages in wheat, rice, sports goods, leather, surgical instruments, pharmaceuticals, cement, yarn, steel, men’s suiting, auto parts, mining, and dairy. Both economies, with their well-established agricultural bases, can significantly benefit from knowledge exchange in agricultural technology, hybrid seed development, and food processing techniques. Furthermore, cooperation in the Halal food sector presents untapped market potential.
The information technology (IT) and startup ecosystems also offer promising avenues for collaboration. Bangladesh’s IT industry has witnessed exponential growth, particularly in software exports and freelancing. Pakistan, with its highly skilled IT workforce and expertise in artificial intelligence, financial technology, and cybersecurity, can facilitate joint ventures in IT parks, capacity-building programs, and technology transfer initiatives to expedite sectoral growth. The pharmaceutical industry in Bangladesh has emerged as a cost-effective global supplier of generic medicines. Pakistan, possessing a strong foundation in pharmaceutical research and development, can engage in collaborative drug manufacturing and export-oriented healthcare services. Additionally, investment in medical tourism and healthcare infrastructure presents lucrative prospects for both nations.
Both countries also have considerable potential to develop a South Asian tourism corridor, leveraging Bangladesh’s rich historical and natural attractions alongside Pakistan’s diverse cultural heritage and mountainous landscapes. Enhancing the hospitality sector through bilateral tourism agreements and visa facilitation could substantially increase cross-border travel and economic activity. Improving logistical networks and establishing direct trade channels can significantly enhance bilateral trade. The creation of regional trade hubs and standardized trade facilitation mechanisms would optimize supply chain efficiency. Encouragingly, direct flight connectivity between Pakistan and Bangladesh is being prioritized as a key enabler of economic and people-to-people exchanges.
Chambers of Commerce in both nations play an instrumental role in fostering economic reintegration through trade facilitation and commercial diplomacy. By advocating for favourable trade policies, facilitating corporate networking, and negotiating bilateral trade agreements, these institutions serve as crucial conduits for economic cooperation. The establishment of a Joint Business Council between the Islamabad Chamber of Commerce & Industry and the Dhaka Chamber of Commerce & Industry is poised to create structured commercial engagements. At the governmental level, the implementation of a Free Trade Agreement (FTA) is imperative to further consolidate trade relations.
Regular business forums, trade missions and investment conferences can drive market expansion and foreign direct investment (FDI), while Special Economic Zones (SEZs) offer incentives to boost industrial growth and economic synergy. Bangladesh presents significant investment opportunities for Pakistani enterprises in ceramics, apparel, steel re-rolling, cement, pharmaceuticals, auto parts and tourism. Chambers of Commerce must advocate for trade policy reforms, tariff reductions and regulatory simplifications to ease business operations. Leveraging the South Asian Free Trade Area (SAFTA) framework can reduce trade barriers and enhance regional collaboration. Joint vocational training programs in textiles, IT and manufacturing can develop a skilled workforce, while trade bodies should promote knowledge-sharing to foster corporate innovation and sustainable growth.
—The writer is Secretary General ICCI.
(tmalahore@gmail.com)
