Ignored opportunity

THE fact that Pakistan has been recently removed from the Lloyd's Market Asso-ciation war-risk listed areas has not attracted the level of attention befitting it. For 25 years, vessels visiting Pakistani ports had to pay higher war-risk insurance premiums, a charge which increased operational costs and added an element of unpredictability to cargo movements via Karachi, Port Qasim and Gwadar. This extra charge is no longer in effect. The economic effects are at once apparent: when war-risk premiums are withdrawn from the cost of calling at Pakistani ports, the freight rates would fall and the country would obviously become a more price-competitive choice for international shipping. For exporters who have been suffering from high costs of logistics and weak external demand, this change in the situation is by no means minor. The great significance lies in the way things are perceived. When a port or area is included in Lloyd's war-risk list, it sends a message to the international maritime industry regarding the risks involved there, while taking it out of the list sends a message to the contrary. Since Lloyd's is one of the most well-established and risk-averse organisations in the field of international insurance, the changes it makes carry real significance with the shipping companies, the underwriters and the providers of trade finance which depend on Pakistani ports. The true test is still to come. Even in the past, Pakistan has enjoyed improved international standing without turning those improvements into long-lasting trade benefits. Whether this delisting results in higher shipping volumes will depend on port efficiency, handling costs, transit infrastructure and tariff competitive-ness going forward. The opportunity does exist; the effort has only just started. Maheen Zahra Lahore Published in Dawn, August 30th, 2026