Unlocking Potential: A New Era for Pakistan-Turkey Economic Ties

The historical, cultural, and strategic ties between Pakistan and Turkey are deep-rooted, forming a relationship that has long transcended geopolitical considerations. Yet, despite the strong foundations of this partnership, the economic collaboration between the two nations remains underdeveloped, with immense untapped potential. With the global economic landscape shifting, there has never been a more opportune moment for Pakistan and Turkey to harness their shared interests and forge a new era of bilateral economic cooperation.

As of 2023, bilateral trade between Pakistan and Turkey stands at $1.3 billion—a modest figure when compared to the vast potential both nations possess. The goal of reaching $5 billion in trade volume in the coming years is both ambitious and achievable, but it requires strategic action in key sectors to foster growth. By focusing on enhancing trade relations, boosting investment, and strengthening regional partnerships, Pakistan and Turkey have the opportunity to unlock a multi-billion-dollar economic corridor that can benefit not just their respective economies but the wider region as well.

Expanding Bilateral Trade

Pakistan and Turkey’s trade relationship is primarily centered on textiles, rice, leather, and surgical goods from Pakistan, and machinery, chemicals, and defense equipment from Turkey. While these sectors are important, there is ample room to diversify and expand trade into new areas. One immediate opportunity lies in the Preferential Trade Agreement (PTA) signed in 2022, which has already reduced tariffs on a range of products. The next logical step is to transition this PTA into a Free Trade Agreement (FTA), which would eliminate trade barriers and pave the way for a significant uptick in bilateral commerce.

Beyond traditional exports, both nations can benefit from exploring sectors like IT, pharmaceuticals, agriculture, and services. As the world increasingly moves towards digital commerce, the growing e-commerce platforms in both countries—such as Amazon, Alibaba, and Turkish e-commerce giants—can serve as key drivers of trade. Additionally, improving logistics and connectivity through infrastructure projects like the Gwadar Port and Turkey’s Middle Corridor can enhance regional trade access, making both countries more integral to global supply chains.

Boosting Bilateral Investment

The economic relationship between Pakistan and Turkey is not limited to trade. There is a wealth of potential in joint investments across several sectors. Turkish companies like Limak, Albayrak, and Summa have already made strides in Pakistan’s construction and infrastructure sectors, with projects related to housing, roads, and urban development. These investments can be expanded further, particularly through collaborations in China-Pakistan Economic Corridor (CPEC) and Special Economic Zones (SEZs).

Pakistan’s renewable energy sector, valued at $20 billion, also presents an exciting opportunity for Turkish investment. With Turkey’s expertise in hydropower, solar, and wind energy, both countries can join forces to bolster Pakistan’s energy infrastructure while simultaneously advancing global sustainability goals. The tourism sector, including religious tourism centered on Sufi and Islamic heritage, could further strengthen ties. Turkish hospitality brands and Pakistan’s growing tourism market are ripe for joint ventures.

In return, Pakistan offers its expertise in textile manufacturing, which can integrate seamlessly with Turkey’s well-established apparel industry. Additionally, the thriving tech startup ecosystem in Pakistan provides opportunities for collaboration in the fields of AI, fintech, and cybersecurity, as both countries navigate the future of the digital economy. Meanwhile, Pakistan’s growing halal food exports—ranging from meat to rice—can meet the demands of Turkey’s burgeoning halal market.

Enhancing Defense and Industrial Cooperation

Beyond trade and investment, the defense and industrial cooperation between Pakistan and Turkey has grown significantly in recent years. Joint production of military drones, naval ships, and armored vehicles, as well as the procurement of T-129 helicopters and MILGEM warships by Pakistan, highlights the strong defense partnership between the two nations. Building on this, there is scope for further collaboration in aerospace and space technology, as Pakistan’s SUPARCO and Turkey’s TÜBİTAK Space Agency explore synergies in space tech development.

Another sector ripe for collaboration is the automotive industry. With a rising demand for electric vehicles (EVs) in the global market, Pakistan and Turkey can partner to jointly produce EVs and auto parts, benefiting both nations’ local industries.

Financial and Banking Cooperation

Financial cooperation remains an underexplored avenue for Pakistan and Turkey. Both nations have a strong tradition of Islamic banking, and partnerships between Turkey’s Halkbank and Kuveyt Türk Bank with Pakistani institutions like Meezan Bank can lead the way in developing innovative Islamic fintech solutions. Additionally, establishing a direct cross-border digital payment system could facilitate smoother trade transactions, further boosting economic ties.

Regional Economic Partnerships

Pakistan and Turkey are geographically positioned to complement one another in regional trade. Turkey can leverage Pakistan’s location as a gateway to South Asia, expanding exports to China, India, and ASEAN countries. Similarly, Pakistan can use Turkey’s Customs Union with the European Union as a stepping stone to access European markets with reduced tariffs. Both nations should also focus on integrating into regional trade blocks like the Economic Cooperation Organization (ECO) and the Developing-8 Nations (D-8) to foster deeper economic collaboration.

The Path Forward

Strengthening the strategic partnership between Pakistan and Turkey is not just a matter of economic necessity but of seizing the moment in a rapidly evolving world. By focusing on expanding trade, fostering investment, and collaborating on key industries, both countries have the potential to build a lasting economic corridor. With targeted government policies, regulatory ease, and private sector engagement, this decades-old relationship can evolve into a powerful economic engine, benefiting millions on both sides.

The synergy between Pakistan and Turkey is undeniable. The next step is for both governments to take bold, concrete actions to unlock the full potential of this partnership, creating an economic landscape that offers shared prosperity, innovation, and opportunity for the future.