EU FINDS FAVOURABLE INVESTMENT CLIMATE
Identifying partners for economic cooperation
By AMANULLAH BASHAR
Nov 06 - 12, 2000
The senior representatives of European Union (EU) have given positive signals regarding investment climate in Pakistan. Kurt Juul EU Ambassador in Pakistan and the French Ambassador Yannick Gerard while replying to a question about their observations regarding investment climate in Pakistan said that their visit and meetings with banking sector, business representatives and Universities are enough to indicate the confidence the EU has in Pakistan.
Speaking at a Press briefing the two diplomats said that EU is the second largest investor in Pakistan and desires to further promote trade and economic ties and cooperation with Pakistan. The current visit to Karachi is the part of our programme to identify areas of economic cooperation. There were no sanctions whatsoever from EU against Pakistan over the last 3 years. They said that it was a misconcept, which has been removed from the minds of the government as well as businessmen in Pakistan.
They said that EU has got funds for economic cooperation with Pakistan and other developing countries, the idea behind the current visit to Karachi is to identify partners in the private sector to go for joint ventures. Answering to a question regarding volume of investment, which is much larger in India as compared to Pakistan, the EU ambassador invited the attention of the questioner towards the size of the market available in India. He however said that Pakistani businessmen take advantage of the open market in EU countries. The quality of products always counts. Pakistan has a variety of fruits, vegetable and other products from manufacturing sector including textile products. There is no reason why Pakistani fruits and vegetables can find their place in EU market if they are hygienically fit for consumption. He referred large size of fish export from Pakistan with the technical assistance from EU. Similar exercise can also be undertaken for export of fruits, vegetable or other products to EU, he suggested.
They observed that EU is Pakistan's first partner in trade and its second partner in investment. Pakistan's exports to the EU's single market account for 31 per cent of Pakistan's total exports or Euro 2.2 billion. Trade is now largely in Pakistan's favuor with a surplus of Euro 575 Mio. Under WTO agreements the EU will remove remaining quantitative restrictions on Pakistan's textile exports by 2004.
The EU operates one of the lowest average import tariffs in the world and EU market is open for new exports from third countries as long as they are competitive and safe to use and consume.
The business climate in Pakistan is of clear interest to the EU. As Pakistan needs to export to the EU so does the EU need to export to Pakistan. Our exports to Pakistan have been declining in recent years. So have European investments in Pakistan. The government's efforts to restructure the economy are closely followed by the EU and its member states and we hope this will result in reversal of trends, they observed.
They said that EU-Pakistan cooperation is another important chapter in our relationship. The EU is the world's biggest donor of grant aid and this also holds true for Pakistan. The EU's existing portfolio or development projects is worth in excess of Euro 200 Mio mainly focused on the all important primary education sector but also giving importance to social issues such as primary health, rehabilitation of child labour, food aid and aid to victims of drought, drugs and AIDS. Environmental degradation is also actively addressed in our cooperation, they said.
Karachi is the economic center of gravity of Pakistan. This is particularly true as regards trade, the largest part of which goes to European Union (EU) as exports (31 per cent). Karachi is also the capital of the province of Sindh and the largest city of Pakistan.
As the important partner it is the EU wants to create more awareness about itself in Sindh with a view to strengthening its relations through the Pakistani society. The EU also wishes to become more aware of the problems and perspectives of this important Province. EU already has strong links with Karachi. Earlier the EU funded the development of Karachi's fish harbour. Its fish processing plants are now able to export for Euro 160 Mio to the EU and elsewhere on an increasing trend. The EU activity supports the Area Study Center for Europe at the University of Karachi to strengthen academic ties. The EU funds through grants a number of projects in the social sector: advanced education for teachers, child labour rehabilitation, women's health and more generally strengthening the capacities of NGOs. The EU's existing cooperation programme with Pakistan is worth in excess of Euro 200 Mio.
The present visit follows visits by EU Ambassadors to the Northern Areas and to Punjab and will include meetings with the Government of Sindh, the banking and business communities as well as visits to projects.