APBF calls for strengthening economic gains and to reap full benefits under China’s mega project
Pakistan is not only a trusted friend but a strategic partner of the United Arab Emirates (UAE). Pakistan had always extended strong support to UAE and Pakistanis had contributed a lot in UAE’s social and economic development. Both the UAE and Pakistan need to explore ways for strengthening their cooperation on economic front. Although some groups of UAE are operating in Pakistan, especially the Al Nahyan group of companies’ investment in Pakistan is at $6 six billion while more investment is expected in various sectors.
China-Pakistan Economic Corridor (CPEC), which is a part of China’s ambitious One-Belt, One-Road multi-billion dollar initiative, and also part of Pakistan’s Vision 2025, has opened host of opportunities for investors of different countries including UAE. Pakistan will be pleased if the UAE can benefit from the CPEC, as this is a win-win situation for all countries in the region,” analysts said, adding: “Pakistan and China were working on huge projects on infrastructure, roads and railway networks. Most importantly, both countries are also investing in the energy sector.”
As per the Asian Development Bank 2017 report, Pakistan gross domestic product (GDP) growth is expected to edge up to 5.2 percent in FY17, and 5.5 percent in FY18. Higher growth in fiscal year 2017-18 reflects accelerated infrastructure investment through China-Pakistan Economic Corridor (CPEC), which is steadily lifting consumer and investors’ confidence. This outlook for Pakistan is supported by better security, macroeconomic stability, and improved economic fundamentals resulting from the continued implementation of government reforms.
Talking to PAGE, analysts described CPEC as an ideal investment opportunity for Emirati investors since the UAE was the second largest Gulf Cooperation Council (GCC) trade partner of Pakistan, with a trade surplus of US$5 billion.
According to them, the UAE is already one of the main investment partners in Pakistan. In fact, according to some estimates, it is the third largest investors. There will be huge opportunities coming from this project, for all countries of the region. They said the CPEC offers a range of benefits, including reduction in the physical distance goods have to travel, thus reducing the carbon footprint. At present, goods travel nearly 13,000 km to reach China, but utilizing the CPEC route, the distance is reduced to just 3,000 km to Kashgar, the westernmost Chinese city, located near the border with Kyrgyzstan, Tajikistan, Afghanistan and Pakistan.
This would also reduce transportation costs considerably. The new Gwadar Port, at the western end of CPEC, will drastically boost the mobility of goods in the region. For example, oil exporters to China can maintain strategic reserves in storage within the port, they added.
In the last few years, UAE companies have invested billions of dollars in all major sectors, particularly banking, infrastructure and communications. These sectors provide ample opportunities for further investment, as Pakistan’s fast-expanding economy expects to achieve 5.5 percent GDP growth this year, the analysts believe.
A lot of developments are now taking place in infrastructure, Pakistan also have a huge agricultural, communications, health and banking sectors. This is where UAE companies can benefit, they opined. It may be noted that the food, beverages and agro- sector exports to Emirates has touched approximately dollar half a billion mark and there was a 27-percent jump in food exports to UAE in two- year.
Pakistan has boosted sales of its traditional agricultural products while simultaneously expanding its reach into new product areas such as processed meat and poultry products, tea, concentrated milk and cream, certain fruits and vegetables, spices, herbs and confectioneries.
Experts believe that meat and processed frozen food is another important growth sector for Pakistani exports crossing US$ 100 million mark in period of last three years. Exports of Pakistani fruits and vegetables have also increased over 100 percent in the past three years. Sales of dried fruits and vegetables to the UAE rose two-fold and four-fold to US $ 9.7 million and US $7.8 million, respectively.
The country exported US $5.9 million worth of potatoes to the Emirates last year – an eight-fold increase on 2012 figures, while sales of Pakistani fresh and frozen meat have crossed US $ 50 million. Onions, garlic and leeks, fresh or chilled and ginger have also witnessed 300 percent export growth over the past three years.
APBF SUPPORTS THE PLAN
On the other hand, with a view to consolidate the economic gains amid significant improvement in domestic security the All Pakistan Business Forum (APBF) has recommended the government to keep on fixing major growth constraints to reap the potential benefits of China-Pakistan Economic Corridor (CPEC).
APBF President Ibrahim Qureshi said that only drastic steps can revive the economy, which should be grown significantly and constantly for visible impact, asking the authorities to take continued efforts, as CPEC is going to be a major opportunity to boost growth and development. The project could also be important to eliminate energy deficit, which had slowed down the economic growth in the country in past.
He stressed the need for continued economic reforms with a view to achieve high growth target as more regulations in system require an enabling environment to promote business and attract foreign investment.
Mr. Ibrahim Qureshi said that FDI improvement reflects the improvement in security situation, implying that investors had started coming back to Pakistan. Moreover, country’s liberal policies of investment offered one of the most attractive investment regimes in the region. He said that Pakistan’s trade with European Union has increased substantively after the grant of GSP+ status to Pakistan.
He urged the commerce ministry to explore opportunities to diversify exports of goods and services in their respective areas, suggesting it to devise strategies to promote Pakistani products. He called upon trade officers to take advantage of opportunities offered by China-Pakistan Economic Corridor and growth in Pakistan’s national economy made possible by strengthening of democratic institutions and improvement of security situation in Pakistan.
He said that the IMF has also forecast 5 percent economic growth for 2017, which could improve to 6 percent in the medium term with CPEC-related investments, improved energy supplies and continued reforms.
APBF President also urged the authorities to strengthen export-oriented and manufacturing industries through smooth energy supplies, since a number of issues in the fiscal, external and energy sectors could affect the economic stability achieved so far.