IT might take a little longer for Pakistan to start blinking on the US investors’ radar. The bilateral trade volume, however, can increase by as much as 20 per cent before the current fiscal ends in June next year.
This was gathered after discussing the issue with some officers manning the Asia desk at the US State Department and the Pakistan mission, as well as representatives of the private sector and academics interested in the topic.
It was , however, considered unrealistic to expect overseas investors to become active in a country where local investors were reluctant to commit resources for capital spending.
However, the relevant quarters are looking forward to Prime Minister Nawaz Sharif’s visit to the US later this month. “We are all set to arrange business meetings during his visit to attend the UN general assembly session. There is goodwill for the PM, with his background in industry and a clear bend towards market solutions,” commented a PML-N appointee at the mission.
“Time is on his side. Much will depend how well his kitchen cabinet and economic advisors succeed in projecting the country as a responsible, resourceful and business-friendly nation that is serious in pursuing peace and development for mutual benefits.”
Trade officials also tend to assume that the renewed focus on bilateral economic relations over the past one year will pay dividends in the short run.
But businesses generally do not share their investment plans with Pakistani officials. “I know for a fact that many deals between private companies of the two countries are in the making, but we have not been informed. They come to us with problems, but like to keep their future plans to themselves,” said an officer in the commercial office at the Pakistani embassy.
“The London and Dubai gatherings were well attended, but no one monitored the follow-up, as the government did not task anyone to do so,” a career diplomat told Dawn informally at a gathering in New York.
On the reluctance of US investors, another analyst said “an array of incentives offered to US businesses probably did not measure up to the risk (real or perceived) that a company here associates with Pakistan”.
“The public perception in the US, which brackets Pakistan with Afghanistan, undermines the country’s position as a possible investment destination,” he made a point.
Earlier this year, Pakistan’s National Insurance Company Limited introduced schemes to extend insurance cover to US businessmen visiting Pakistan and their merchandise at a minimal cost, informed a senior government official.
“It has not increased US business visitors to Pakistan, from what I know,” another officer who attended the Dubai business conference in June said when probed.
Experts expect the total volume of the two-way trade between the countries to increase from the current $5.2 billion to $6.2 billion by June 2014, if the business community and the government work closely to this end.
“Another one billion worth of exports to the US is achievable in FY2013-14. The suspension of Bangladesh’s Generalised System of Preference (GSP) status last month by Washington has created a void in the US market, which can be easily filled in with products from Pakistan,” said a member of the diplomatic corps of Pakistan.
According to information forwarded by experts, there are 3,511 commodities in all that are covered under the GSP. “While enjoying GSP status in the US for the last four decades, lack of diversification in the product range did not yield any positive outcome.”
“Textiles and textile apparel constitute over 90 per cent of the $3.6 billion worth of exports to the US. The balance of trade is favourable to Pakistan, as its imports from the US amount to $1.6 billion,” commented a trade officer.
He identified several product categories in which Pakistan has the scope to penetrate the American market while taking advantage of its GSP status. These include gems and jewellery, polyethylene terephthalate (PET), glucose in solid, manicure and pedicure products, gloves and mittens, mixture of spices, dates, rice, sports equipment, marble and special fruits and vegetables.
“The onus of underutilisation of the bilateral trade potential rests on Pakistan’s business community,” lamented another officer.
A measured written response on questions regarding the follow-up of the Dubai conference e-mailed to Dawn from the Pakistani embassy in Washington is reproduced here.
“The Dubai Business Conference, held in June, was a sequel to the London Conference held in November last year, and part of regular bilateral business dialogue. An important outcome of this conference was the launch of the Pakistan Private Investment Initiative (PPII) by the US. It provides an initial commitment of $48 million to finance small and medium investment initiatives in Pakistan,” the message said.
“The Dubai Conference provided a particularly good opportunity to the new government to share it’s vision and priorities for promoting and expanding business opportunities between the US and Pakistan. We look forward to further building and expanding on some of the ideas proposed at the conference, and facilitating business exchanges between the two countries,” the statement concluded.
A request to record comments of the relevant US officials was politely turned down. “We need to seek permission to speak to the press,” said said an official dealing with bilateral economic issues.
The writer is on a visit to USA