The participants in the one day seminar on
"Global Economic Challenges and the role of Foreign Office"
were of almost unanimous view that the National Foreign Service must
assume a major role in economic diplomacy to meet the new age challenges
posed by the globalisation process under the WTO regime.
The seminar which was organised by the foreign
office, prior to 2 days envoy conference in Islamabad was attended,
besides Foreign Minister, Foreign Secretary, senior officials of the
Foreign Ministry and Pakistani ambassadors at the UN and world's
important capitals, representatives of major trade business houses and
prominent businessmen and economic writers.
The speakers, however, emphasised that before
assuming such a role, it was necessary to introduce a coordination
mechanism between the public and private sectors at home to support the
efforts of diplomats abroad. Such a mechanism will have to bring
together the private and public sector institutions involved in trade
promotion and the Foreign Office to remove bottlenecks and expedite
action on demands from the external markets.
The emphasis was on the textile trade as the current
quotas on cotton products will be abolished by the end of the next year.
Pakistan, with 10 per cent of global cotton production but a meagre two
per cent share in textile quotas, will face a fierce competition in
efficiency, quality and the prices.
Foreign Minister Khurshid Mahmood Kasuri spoke of
other challenges that will follow in the wake of globalisation process
in addition to the textile trade. He said the new situation will also
cause competition in securing greater inflow of foreign direct
investment, place a heavier responsibility for debt retirement, require
diversification of national export base as well as export markets,
enhance market access and export competitiveness.
He wanted his audience to take cognizance of the
situation that will confront the nation year-and-a-half later and devise
ways to stand up to those multiple challenges, both extremely and
Kasuri said that the country had as many as a hundred
missions abroad and asked his audience to use those as platform for an
optimum promotion of national economic and commercial interests.
He also urged the captains of the private sector to
focus efforts on research and development, image-building and proper use
of the electronic media. The Jamali administration, he added, was
striving to create "requisite institutional arrangements" that
would facilitate closer intra-government co-ordination and enhance
public private sector collaboration. Their recommendations, Kasuri
assured, would be the major priority for his Ministry.
The current economic situation of the country, he
said, was encouraging as the foreign exchange reserves stood at
"unprecedented level of over 10 billion US dollars" and there
was a considerable increase in the revenue with the inflation standing
at an all-time low. The exports, he added, were growing rapidly with a
sharp reduction in the public debt and budget deficit.
The nation needed to sustain this and work harder
than before to further improve upon the achievements, he said. The new
trade policy envisaged an export target of US $12.1 billion but all
these could only be achieved through "intensive and effective
co-ordination by way of making institutionalised arrangements to involve
public and private sectors, including the Foreign Office, he added.
Before ceding the platform to experts on foreign
trade, the Ministry proposed the creation of a high-powered
co-ordination committee comprising representatives of Foreign Office,
Ministries of Commerce, Industries, Investment and Privatisation, Export
Promotion Bureau and private sector. The committee, he suggested, could
meet once every two months to remove bottlenecks and ensure co-operation
between public and private sectors.
Speaking on the occasion, Ambassador Munir Akram
stressed the need for greater awareness about the coming challenges that
the WTO will throw open. He called for improvement in the law and order
situation at home, better educational and health facilities and
consolidation of economic gains to move the country towards a
"takeoff stage". He also drew the attention of the assemblage
to the changing scenario in South Asia and lessening of tensions between
Pakistan and India and said it was time that measures to initiate flow
of trade between the two countries should be considered.
Munir Akram said that Indian request for transit
trade through Pakistan should be taken seriously, as it will make the
country "a hub of trade" between East and West.
Engineer M. Akbar Sheikh of North Star Textile Group
considered it necessary for the Foreign Office to "update its
knowledge on the economic aspects of the international agreements"
as he thought there was plenty of ground to be made up in this respect.
He said that his observation was based on personal
experience having with the Export Promotion Bureau and cited the example
of an agreement like the AGOA that it had under the advice of the
Foreign Office hailed as "golden opportunities for Pakistani
textiles". It did not turn out that way. Another example cited by
him was the visit of a Pakistani constructors delegation to Kabul under
sponsorship of the EPB. Two days after the delegates returned home
Afghans stormed the Pakistani embassy there. Another problem that
Pakistani faced abroad was of its image as both the product and
"societal quality" needed improvement and thought that the
country's missions abroad could be of great help on those two fronts. He
also called for a direct communication between the embassies and the
Pakistani industry on a widespread basis and use of electronic mail
services for this purpose through which the embassies could reach a
Ambassador Ashraf Jehangir Musa Qazi welcomed the
improvement in foreign reserves but did not favour their use for foreign
debt servicing, as it would defeat the objects of modernisation of the
national industry. Qazi, who prior to joining his post at Washington was
High Commissioner at New Delhi, drew the support for the idea of
reopening trade with India. He thought it would help ease tensions and
improve the political situation in the region.
In his speech, former bureaucrat and now a private
consultant, Akhtar Mahmood, urged the private sector to take initiative
in this respect and act on its own to meet the competition that the WTO
regime will bring to Pakistan. He disapproved the attitude of leaving
everything to the government and waiting for things to happen their own.
The Zonal President of the Federation of Pakistan
Chamber of Commerce and Industry, Sohail Altaf and several other
representatives of the federation took an active part in the discussion.
They pointed out that there was a greater need for co-ordination between
the various ministries, the Foreign Office and the missions abroad.
Particularly, Sohail Altaf urged that the commercial
counsellors and also the heads of the missions for a closer link with
the local chambers and acquiring greater knowledge about the various
trade regimes and laws like the laws on anti-dumping. He gave instances
of some ambassadors who, he said, had not visited the local chambers and
also had no contacts with the exporters of their host country and hence
could not contribute to the promotion of Pakistan's foreign trade.
Several other participants, including diplomats and
leaders of the private sector emphasised the need for a greater
co-ordination between government agencies and the Foreign Office
functionaries and preparedness to answer questions from foreign trading
houses, the national missions and also the foreign investors.
In his remarks, Ambassador Riaz M. Khan urged greater
need for standard certification of the Pakistani products and said even
the government in Beijing insisted on this requirement. He said the
condition was stringent against the import of perishables, as each
country wanted to project its environment against pests and green
diseases. He said Pakistani mangoes could become popular if the
consignments were pre-certified against disease.
Winding up the proceedings, Foreign Secretary Riaz
Hussain Khokhar promised to make a better dialogue platform between the
private sector and his colleagues but said that financial constraints
often hamper their capacity to provide service. However, he said his
Ministry would look into those problems and hoped to have a better
situation report in the near future.
The Foreign Secretary said Pakistan needs to do a
"serious study" before granting the Most Favoured Nation (MFN)
status to India. A very serious study by all the stakeholders, the
business community, the trade organisations and the foreign office is
required before taking a decision to grant MFN status to India, he said
adding there was "no fixed view" on the matter, and there was
a need to look at the issue of trade with India objectively, adding
India has the most restrictive trade regime in the whole world.
It augures well that the authorities organised a well
represented and a constructive seminar to consider the role of foreign
office in preparing the country to meet the challenges of economic
globalisation and trade liberalisation which will commence under WTO
regime about a year and half later. The participants held a very
constructive debate on many aspects and came out with useful and solid
The biggest challenge will be faced by the country's
textile sector as quota regime will come to an end by the close of next
calendar year opening it to international competition. As textile
exports account for about 65 per cent of the country's exports, this is
an extremely important area needing urgent and regular attention.
Another area which also needs immediate attention is the concentration
of exports in few markets. What is thus required is both market and
product diversification for which incentives have also been provided in
the new trade policy. But it seems that much more still needs to be done
to boost exports. By producing exportable goods at internationally
competitive prices and constantly improving upon their quality, a niche
can be created in world markets. At the same time, the economic
ministers and counsellors could be preferably inducted into service from
amongst economic and trade experts who should be closely watching the
world markets. That will help in achieving the desired objectives.
The recommendations made by the seminar will be of
immense value in policy articulation about economic diplomacy. The
nature and scope of WTO rules and regulations is also well known. As
such the work to map out the strategy of meeting global economic
challenges should be speeded up. It will also be necessary to provide
adequate funds for the new strategy to be effectively implemented. The
theme of economic globalisation has been discussed for long but it is
time that the foreign ministry, economic ministries and the private
sector concerted their action to meet the challenges arising out of it.