The idea was raised at a round table on "SCO and the economic interests of Pakistan," organised by the Federation of Chambers of Commerce and Industry of Pakistan (FPCCI) and the GREF Research Center in Lahore.
The proposal came from GREF Chairman Sikander Afzal, who stressed the need for an investment and trade bank independent of the US dollar, euro or British pound sterling in transactions. That would promote trade in local and common currencies as well as in the barter format, he argued.
Many countries are moving away from the dollar, especially as US debt balloons, Scotland-based writer and political observer Parvez Salik told Sputnik India.
"A common effective strategy for cash-strapped countries is to pay in local currency and barter," Salik noted, so "the proposal by the leaders of Pakistan's business community to create a trade development bank in local currencies is a solid one."
Countries that face sanctions and threats from the US and its western allies are pivoting toward associations like SCO and BRICS, the commentator said.
Pakistan has good ties with Russia and China, who are both members of BRICS, and it should work towards improving ties with neighbour, Iran, Salik stressed.
"Pakistani leaders should try and discuss joining the BRICS alliance, because Pakistan has a vast reserve of natural resources like coal, oil, gas, gold and much more, but it needs supportive international partners to extract these resources, and I feel that being part of SCO and BRICS can aid the country in that," he added.
Recent discoveries of large oil and gas reserves off Pakistan's Arabian Sea coast have sparked hopes for an economic revolution in Pakistan, potentially reducing its reliance on energy imports.
The reserves could be some of the world’s largest, with Pakistan potentially having the fourth-largest deposits globally.
A "realignment of blocks in the international domain" is taking place, former Pakistan Air Force (PAF) squadron leader and international security analyst Fahad Masood told Sputnik India.
"The west is losing global control as the east is rising with China and Russia at the forefront," Masood said. "The Gulf countries like Saudi Arabia, Qatar and the UAE are also realigning with the east."
Currently the military establishment of Pakistan is looking for solutions to country's vast economic challenges, which occurred after political instability and regime changes of the past few years, he emphasised.
While countries like China and Saudi Arabia have aided Pakistan to the tune of billions of dollars, those were loans and not gifts, the expert pointed out, and international organisations like the International Monetary Fund (IMF) just add more debt burden to Islamabad's massive debt load.
"The issue that Islamabad is currently facing is understanding its national interest," Masood said. "As the saying goes, in international politics there are no permanent friends nor enemies, the only thing permanent is the national interest."
Pakistan may have trouble understanding its national interests, as policies change with each new regime.
Those national interests need to be identified, documented and written down for eternity for the political elite and establishment so they are not altered every couple of years, and the debt is reduced rather than increased, the analyst added.
The creation of a specialised investment and trade development bank within the SCO, independent of the currencies of Western countries, is a good solution for the present moment to aid businesses of Pakistan, Masood argued.
But in the long term he believes Islamabad needs to work on improving the business climate within the country so that long term and sustainable solutions for the economic challenges are brought forward.
Islamabad is hosting this year's SCO summit, with international delegations flocking to the capital for bilateral meetings, dinners and a series of activities.
The SCO comprises China, India, Russia, Pakistan, Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Belarus — with 16 more countries affiliated as observers or 'dialogue partners'.