PAK-TURKEY ECONOMIC RELATIONS
Great economic benefits would flow from it for Pakistan
By Prof. FEROZUDDIN KAZI
Dr. MUHAMMAD AYOOB SHAIKH
Feb 25, Mar 10, 2002
Turkey is an independent republic occupying a region that has played a major role in world history as a bridge connecting East and West. East West expansion of the worlds geographical horizons has ushered in a new era for a country situated in the fertile crescent and cradle of civilization. It is a democratic, secular and social state governed by the rule of law, and all the individuals are equal without any discrimination before the law, irrespective of language, race, colour, sex, political opinion, philosophical belief, religion and sect, or any such considerations.
At the end of 1995 the population of Turkey was 61.6 million, and its total land area is 779,452 square kms with 67 provinces. It is one of the more developed Middle Eastern countries, and industrialization is in progress. Tourism, stimulated by the fine climate and the abundance of historic sites, such as Troy, Pergamum, and Ephesus, is beginning to gain importance.
Turkey lies within the Alpine-Himalayan mountain belt, and more than 75% of the land lies at elevations above 500m(1,640 ft). It is one of the most active earthquake region in the world. Turkey may be divided into four physical regions.
The people of Turkey are overwhelmingly Turks (about 90%) and Sunny Muslim (98%). About 3 million KURDS live in the eastern provinces, and several hundred thousand Arabs inhabit the Halay enclave adjacent to Syria. The number of Greeks was dramatically reduced by the population exchange between Greece and Turkey following the Treaty of Lausanne (1923). About 25000 Jews live primarily in Istanbul, Ankara, and Izmir. The Greek orthodox community is the largest Christian denomination, followed by the Gregorian Church. Most of the population speak Turkish, although minorities speak Arabic and Kurdish.
More than half the population live in urban areas. Istanbul is the cultural, industrial and commercial center; Ankara is the capital. Other major cities are Izmir, Adna, Anlakyo, etc. largescale migration to the cities since the 1950s has led to overcrowding.
The per capita income, however, remained lower than most industrial countries. Turkey receives significant financial aid from the European Community (EU), to which it applied for membership in 1987. Many Turks work abroad, which helps to keep unemployment under control remittances from these works provide a major source of foreign exchange.
Agriculture accounts for less than 20% of the GNP, although it employs well over half of the labour force. Cereals are the principal crops. Vegetables, grapes, sugar beats, potatoes, and oilseeds are also grown, and cattle, sheep, goat and poultry are increased overgrazing is a problem in many parts of the country. Forests cover more than 25% of the land. Much of the wood harvest is used for energy. The commercial fishing industry is being developed.
Turkey is a historical gateway from the ancient Silk Road to knew markets becoming a powerful focal point as a cultural and a political intermediary as well as a trade centre growing importance.
The friendship between Turkey and Pakistan derives its strength from the bonds of brotherhood. This traditional, deep rooted brother-hood is the greatest asset of the two countries.
The legal framework of the trade, business, economic & commercial relations between Turkey and Pakistan is based on the following bilateral instruments: The Trade Agreement of 1964, the Prevention of Double Taxation Agreement of 1985, the Agreement for Mutual Promotion and Protection of Investments of 1995 and Protocol on Scientific, Technical and Economic cooperation, signed in 1995. Also inforce is a Tourism Cooperation Agreement dated 1981.
Turco-Pakistani trade in the decade of 90s shows that the commercial exchanges between these two friendly nations are on the increasing trend. The export from Pakistan to Turkey has increased from Rs. 1866 million to Rs. 3162 million in the year 1990-91 to 1999-2000. Import from Turkey to Pakistan also went up by Rs. 1111 million to Rs. 5516 million in the above same period. So it is clear that Turkey had exported more to Pakistan during the decade of 90s the deficit balance was Rs. 4677 million. As the evidence is given in table-I.
Year Export %Increase (+)Decrease(-) Import %Increase (+)Decrease(-) Balance
Increase over the period
Source: Economic Survey 2000-2001, Government of Pakistan Economic Advisor's Wing Finance Division, Islamabad. P-105.
Turkey is the trade partner of Pakistan. The major export items of Turkey to Pakistan include among others industrial goods (especially communications material like cables, etc., chemicals and foodstuff. The Pakistani exports to Turkey are mainly cotton yarn and other textile products are semi-products.
It is also noted that this level of commercial exchanges does not reflect the real trade potential between two countries. Turkey's trade with our country is very insignificant, considering its 1996 level of trade volume amounting to US $ 64 billion. Turkey produces many items that can be interesting for the Pakistani market. In this context, we can mention the durable goods, especially electronic devices for home use like T.V. sets, refrigerators, washing machines, etc. that Turkey exports to many European, Gulf and other countries. They are quality products with competitive prices. On the other hand, Turkish automobile industry is booming with 08 different multinational companies manufacturing more than 200,000 vehicles a year in the country.
A ninth company is about to realize investment in the same sector. Buses, coaches, trucks, cars and tractors made in Turkey are being exported to several Middle East and Gulf countries as well as to Europe. Ironically Turkish made Italian cars are being exported to Italy. They even have made their way upto Argentina in South America. Referring to the above things.
The major Turkish investments in Pakistan such as the Islamabad-Peshawar highway by the Turkish company, Bayindir. An other Turkish company, STFA is a major partner in the joint venture for the Karachi Light Tram and has also realized other important projects such as the Lahore by pass, portions of the Indus high way, Ormara Naval Base and the Karachi Port improvement and on the other hand, TEKSER.
Company has undertaken the realization of the Chashma irrigation project irrigation canals and harbours. These investments amount to almost 1.3 billion US$.
Indeed, Turkish private sector is already making a contribution to the development of the infrastructure of Pakistan and there is an upward trend in commercial relations.
It is observed that there is similarity of views between Pak-Turkey on most of the international and regional issues that the world is confronted with.
Pak-Turkey trade relations and friendship derives its strength from the bonds of brotherhood and this traditional, deep-rooted brotherhood is the greatest asset of our both countries.
Under these most favourable circumstances, it is incumbent upon us to make every effort for the enhancement and diversification of the scope of our bilateral relations in every field. In this context both countries must see to it that the younger generations are well versed with the origins, roots of trade and friendship. Pak-Turkey commercial and economic relations should be at a level reflectives of the close political ties that both countries so happily enjoy.
The government of Turkey and Pakistan must take effective and courageous measures by introducing important reforms to transform both countries economies to be governed by free market economic principles.
Pakistan's major reliance is one export of cotton and cotton textile items. A major chunk of textile exports comprise of gray cloth and yarn so that is not sufficient for foreign exchange. Pakistan must take efforts to produce value-added products. Further focus should be shifted to other items like export of leather products fresh and dry fruits and vegetables, plastic goods, electric items, sanitary goods, denim fabric garments. The fresh flowers and dry flowers arrangements have vast potential export markets. Pakistan can export so many kinds of other commodities, which have the best market in Turkey.
If Pakistan increase its export then it must export those items, which are more, demanded by Turkish government. In this way, the balance of trade will remain positive on one hand and earn foreign exchange on the other hand.