Baku’s sweet deal might drive Pakistan’s sugar industry to new heights
Businesses look towards Baku, as Azerbaijan remains poised to invest in Pakistani motorways, despite the Eurasian country's economy being 130 per cent smaller than Pakistan’s economy in terms of GDP in a move to strengthen bilateral relations via investments.
As it stands, Baku is planning to invest in motorways M6 (Sukkur-Hyderabad) and M9 (Hyderabad-Karachi). It is interesting to note, though, that two years ago, Deputy Commissioner Tashfeen Alam of Naushahro Froze fled Pakistan to Azerbaijan after potentially embezzling two billion rupees from the budget that was allocated to the Sukkur-Hyderabad motorway: The same one Baku wants to invest in.
Regardless of the embezzlement scandal and the officer’s subsequent escape to Azerbaijan, Baku’s plan to invest in Pakistan’s motorway construction will spell great news for businesses. This is due to the fact that the construction of motorways will significantly improve connectivity, helping obscure markets emerge and get connected to the wider Pakistani market.
The beneficiaries will be those enterprising locals who will start up businesses once they obtain road access. This is possible as obtaining road access will enable them to capture the increase in traffic that will start to flow through their area. Rest stops and fuel stations are expected to be set up along the length of the motorway.
The construction of the motorway will also cut travel times down and allow for a greater volume of goods to pass from Sukkur to Karachi. This is expected to facilitate the growth of sugar production and exports greatly.
As per the Sugarcane Policy Analysis for 2023-24 by the Agricultural Policy Institute, Sukkur produces 406.11 thousand tons of Sugar annually, while Hyderabad has an abundance of sugar mills. Connecting these two cities via M6 will allow for a greater volume of sugar to be processed.
It is possible that sugarcane farmers in Sukkur decide to make an attempt to improve their yields as they know they can access Hyderabad’s mills with ease. As for millers in Hyderabad, they will secure a fresh supply of unprocessed sugar to work on.
The second leg of the journey will be the transport of processed sugar, via M9, to the port city of Karachi, where this sugar could get packaged and exported. If exports are boosted, Pakistan could see the export figure for sugar value to sit around half a billion dollars.
Aside from the sugar industry, Baku’s willingness to invest in the motorways is a win for Islamabad. This is because the increase in Foreign Direct Investment (FDI) levels will positively signal to other countries that Pakistan is an optimal destination for foreign investments.
If the meeting between the Pakistani delegation and Azerbaijan goes through, those involved in the sugar industry will respond positively to this sweet deal.