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Pak-Australia cooperation
EDITORIAL (June 19 2005): President General Pervez Musharraf's just concluded three-day visit to Australia, the first such visit by a Pakistani head of state, elicited a special assertion of support for Pakistan's economic development from his host, Prime Minister John Howard. Australia's new-found interest in Pakistan's development, though, springs from an unsavoury source: its worries about the threat of extremism. A close ally of the US in its fight against terrorism, Australia experienced extremist violence first-hand in a devastating attack in Bali, which killed several Australian tourists. Yet given the vast physical distance between the two countries, it may surprise some in Pakistan that three of the four people under arrest in Australia for involvement in terrorist violence are believed to have had training in Pakistan. Hence the issue figured prominently in the speeches of both General Musharraf and Howard. The Australian Prime Minister, picking up on General Musharraf's assertion a day earlier, said that trade and investment could help stamp out poverty, which serves as a breeding ground for militancy.

The two countries signed an MOU that is to serve as a framework for co-operation against terrorism between the two countries. Another MOU, they signed seeks to enhance co-operation in the fields of agriculture and commerce. Australia is to provide 6.6 million dollars assistance, over the next four years, to develop Pakistan's agriculture. A much welcome aspect of the programme, to be co-ordinated by the Australian Centre for International Agricultural Research, is that it is to promote collaborative research on agricultural issues of common interest. Furthermore, it is to help explore mutually beneficial commercial and investment linkages in the agricultural sector. The two countries also signed an agreement to establish closer ties between the Australian Securities and Investments Commission (ASIC) and the Securities and Exchange Commission of Pakistan. Its stated objective is to share information in order to protect investors, reduce insider trading, market manipulation and other fraudulent practices. Australia's being an advanced economy, ASIC can, indeed, offer a lot of useful advice to its Pakistani counterpart on risk management and better corporate governance. At some point in the future, the relationship between the two bodies may also serve as a convenient conduit for cross listing of companies in their respective stock exchanges. For long, Pakistan and Australia have enjoyed healthy trade and investment ties. As General Musharraf and Prime Minister Howard noted with satisfaction in their joint statement, the two-way trade during the last year stood at 660 million dollars. Australian companies, they rightly pointed out, have made significant investments in Pakistan's resource sector, and BHP Billiton, the largest such company, holds 38.5 percent of the shares in Sindh province's Zamzama gas field. Nonetheless, there is a huge trade and investment potential that remains untapped. For instance, Australia with its expertise in the dairy sector and Pakistan with its abundant milk production can enter into profitable joint ventures to manufacture dairy products. Import of good quality Australian iron ore is another possibility. Trade in this sector, so far, has remained in the negative territory because of the distance and consequently high transportation charges. However, during the recent years, trade routes everywhere having become busier and therefore relatively cost-effective, it may now be time to take a fresh look at the feasibility of iron ore imports from Australia. The MoUs that the two sides have signed, hopefully, will open up many such new avenues of economic co-operation.