The nation needed to work harder than before to further improve upon the achievements


Aug 04 - 10
, 2003 




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 internally.

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 large audience.



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 recommendations.



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.