April 2, 2006	Sunday	Rabi-ul-Awwal 3, 1427

KARACHI, April 1: The arguably successful holding of the five-day grand show of Expo Pakistan 2006 would be more important for its ‘substance’ than ‘form’ for the country’s corporate sector. The business alliances and memorandum of understandings (MoUs), which may have been singed by some of the 663 companies listed on the stock exchanges, would be drowned in the sea of aggressive campaigning by 30,000 private companies, innumerable partnership firms and private businesses.

“But just the fact that the event passed off without an ‘untoward incident’ would boost the ‘sentiments’ of investors both within and outside the country,” says a business tycoon, who was a close watcher. That will also fortify such compelling favourable thoughts for Pakistan as a ‘peaceful’ place and a safe destination for investment.

More so, as the Expo 2006 comes quickly on the heels of the World Social Forum in which foreigners from all across the globe participated in vast numbers. What else would those delegates have carried home but the memories of Karachi (and perhaps Pakistan) as a warm and friendly host?

As for the Expo Pakistan, more than a thousand people from 57 countries converged on Karachi (March 29 to April 2) to participate in what the Export Promotion Bureau said presented an ideal platform for projection of businesses, establishing new contacts, learning and sharing, building business alliances and establishing joint ventures. The EPB had promoted it as the second such event, after the Expo 2005. The aim of the Expo 2006 conference was stated to be to highlight the potential of Pakistani exports and the opportunities that Pakistan offers to foreign buyers and investors.

President Pervez Musharraf who inaugurated the expo on Wednesday was quite ‘bullish’ on Pakistan’s exports which he hoped would touch the mark of $18 billion this fiscal year. He related the export figures for the first seven months (July to January) as hitting the mark of $9.3 billion. But that information was a day old. The SBP on Saturday posted on its website the eight months’ (July-Feb) export figures, which were noted to have edged higher to $10.2 billion.

On the eve of the Expo 2006, dozens of agreements have been signed by the Karachi Chamber of Commerce and Industry with various trade associations, companies and trade bodies of different countries for the promotion of bilateral trade and investment. That is all very well. But are those agreements mostly in the textile sector? As President Musharraf pointed out in his inaugural address at the expo, textiles accounted for only six per cent of world trade whereas 61pc of the trade happened to be in the heavy industry and engineering sector. That is not the case here, where nearly 65pc of the export trade is dominated by textiles. One observer suggested that out of $18bn of exports, almost $10bn were related to cotton and textile.

Among the stock market listed companies, Nishat Textile Mills ranks as the largest composite unit. The company made export sales worth Rs9.5 billion last year. The business of the company is to manufacture textile, spinning, combing, weaving, bleaching, dyeing, printing, stitching, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fibre. But in dollar terms, Nishat’s exports convert to just about $170 million.

Market sources estimate that the combined exports of textile by all 200 listed companies (125 in spinning, 20 weaving and 55 in composite) do not go beyond $1 billion. And that explains the insignificance of expo impact on the capital markets in terms of documents signed. The government proclaims to have diversified exports into heavy industry and engineering sectors and was striving to develop the export of dairy products. Pakistani rice, sports goods, leather and cutlery are other items popular in the importing countries. But no company of significance in those sectors is listed on the country’s stock exchanges.

Nearly 600 multinational companies (at least a score of them listed) are running profitable businesses in Pakistan. If the mega event of Expo Pakistan 2006 would have done them any good, it would be to raise their confidence in the safety of their capital and dividends. The boost to foreigners’ ‘confidence’ and ‘sentiments’ is in essence more important than the MoUs signed. And in that sense, the Expo Pakistan 2006 would perhaps end up as a successful event.