Time ripe for Pakistan, EU chambers to establish contacts

KHALID BUTT, Bureau Chief, Lahore
Dec 25 - 31, 2006

European Union is giving high priority to trade with Pakistan and encouraging the EU investors to make investment in Pakistan as the consistency in policies and the liberal environment provided by the present government has now started yielding results.

These views were expressed by head of the 11-member EU parliamentary delegation, Ms Neena Gill, while speaking at Lahore Chamber of Commerce and Industry recently. LCCI President Shahid Hassan Sheikh, Senior Vice President Yaqoob Tahir Izhar, former Senior Vice President Sohail Lashari, Executive Committee members Sh Shafique Riaz, Syead Umair and Sh Mohammad Riaz also spoke on various issues coming in the way of Pakistan's trade with EU countries.

The head of the delegation, while appreciating the economic reforms initiated by the government, said that this was a right time that the chambers of commerce in Pakistan should establish linkage with EU chambers to increase the volume of two-way trade.

She said that EU acknowledges Pakistan's efforts for poverty alleviation and economic revival but there is a need to take more steps for improving its perception in the eyes of foreign investors.

The EU delegation consisted of Edward McMillan-Scott, Josef Leinen, Robert Evans, Philip Kamaris, Ms Claudia Schwendenwein, Ms Ruth De Cesare, Balthasar Benz and Parliamentary Secretary Rozina Tufail.

Speaking on the occasion, LCCI President Shahid Hassan Sheikh said that the enhancement in the trade and investment between Pakistan and EU countries is possible through active engagement of the chambers of the two sides and frequent exchange of economic and trade delegations as this would help identify the areas of mutual interest. Participation of Pakistani exporters in the international trade fairs in EU and vice versa can also expand trade between the two countries, he added.

He said that the real problem is the denial of market access to Pakistani products. The level of trade between the two sides can be increased significantly by giving greater market access to Pakistan by removing anti-dumping duties imposed @ 5.8% by the European Union on the export of bed linen from Pakistan, and doing away with the subsidies provided by EU to its agriculture to give a level playing field to Pakistan.

Shahid Hassan Sheikh informed the delegation that doing business in Pakistan is comparatively easier than other South Asian countries.

The top ranked countries in the region are the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), India (134), Bhutan (138) and Afghanistan (162). Pakistan has been the runner-up reformer in South Asia this year.

He said that Pakistan's growing economy and its strategic location as a regional hub gateway to Central Asian republics, large consumer market, abundant natural resources, cheap but skilled labour and liberal investment friendly policies offer immense opportunities to foreign investors.

The LCCI President said that potential sectors of interest for the EU investors could be fruits & vegetables, livestock & dairy development, fisheries, horticulture, storage facilities for agri-products in the agricultural sector, textiles, garments, leather & leather products, chemicals, electrical and electronic appliances, oil and gas, I.T. and infrastructure projects such as hydro- electric power generations, ports & ports handling, civilian nuclear technology, etc. "We are particularly keen in EU investments that could provide transfer of technology to Pakistan," he added.

He said that Pakistan's agriculture produce is among the best in the world, "but we have failed to exploit our traditional strengths in agriculture, horticulture, livestock and food processing because we lack technology". Pakistan is the 5th largest producer of milk in the world. EU equipment, cool chains and technologies could exploit Pakistan's full potential in these sectors.

Speaking on the occasion, LCCI's Senior Vice President Yaqoob Tahir Izhar said that business environment in Pakistan has improved considerably. Pakistan's economy has been growing at the rate of 7.5 percent on average over the last three years. Investment cycle is gaining momentum. Foreign investment has increased by almost three times. Pakistan's stock market is one of the best performing markets of the world. It has outperformed the markets of Malaysia, India, Indonesia, Egypt and Turkey.

He said that Pakistan's investment policy offers attractive terms to foreign investors. 100% foreign equity has been allowed. No government sanction is required. Remittances of capital, profits, dividends and royalty have been allowed. To a question about environmental compliance, LCCI Executive Committee Member Syed Mohammad Umair said that Pakistani business community in collaboration with the government was taking all necessary measures on urgent basis.