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Archive for October, 1985


Countertrade (CT) is a refined form of Barter. Whereas Barter is sovereign between two entities, mostly countries, CT flows across many entities, countries, Multi-national companies (MNCs) and other companies. In the present world, where there are as many as 106 severely indebted countries, CT is used to offset this disadvantage. Whereas CT benefits the poorer countries, it has been successfully used previously by western countries, western companies and MNCs with profit centres in Europe and USA. With the changing face of the world, particularly the protectionist tendencies of the western countries, the Third World countries are increasingly looking to CT to keep the trade flow and profit accruing between themselves rather than give away the advantage to the developed nations.

Opportunities in the Region
A unique opportunity exists in the countries of South Asia and the former countries of the Soviet Union, particularly the Central Asian countries. Most of these countries have need to import commodities and items as well as sell commodities and items but there is little chance of balanced trade or Barter between any two sovereign nations as the items for sale may not be wanted by the countries from where imports are envisaged. It is necessary therefore to have a focus of trade, a centre of gravity that trade flows to and out from in the proportions desired. This focus must have a psychological dominance over its partners to cut across bureaucratic obstacles and it must have a financial credibility to sustain that dominance.



A Few years ago the only countries involved in Countertrade of any type were the then non-IMF countries such as the Peoples Republic of China and the COMECON group. Barter as such was limited between themselves or individually with an IMF country. Between IMF countries themselves, barter was and remains an IMF crime. If any […]


Trade between Pakistan and Bangladesh

The two wings of Pakistan, during the years prior to 1971, had what was aptly called a “complementary” economy. After the trauma of 1971, there was a gray period when there was hardly any trade between Pakistan and Bangladesh.
Many other countries moved in to fill the resulting void. Then, because of the natural phenomenon of “supply” and “demand’ a slow trickle developed through third countries, notably Singapore, into quite a trade volume, before good sense prevailed upon the two governments and a direct relationship was opted for.