KARACHI: The United Kingdom has increased its funding support to Pakistan from £400 million pounds to £1 billion and this is an important statement of our confidence and commitment for trade with Pakistan, said Simon Penney, Her Majesty’s Trade Commissioner (HMTC) for the Middle East, Afghanistan and Pakistan.
The words reiterate a commitment made between Foreign Secretary Jeremy Hunt and Foreign Minister Shah Mahmood Qureshi last week in which the UK agreed “to double the available support for exports to Pakistan”.
“What this means in practice is that part of that money can be used to help UK companies reduce the risk of doing business in other countries. From Pakistan’s point of view, the most important feature of it is the money the UK will make available to Pakistani companies and projects,” said Penney, currently on his first visit to Pakistan, during a meeting with journalists at the British High Commission. He was accompanied by UK Deputy High Commissioner Karachi and Trade Director for Pakistan Elin Burns.
Sharp increase in funding support
Sharing details Penney, who looks after UK Export Finance (also known as the UK’s export credit agency), said that direct lending could be provided for various projects including infrastructure, roads, hospitals, schools, factories and development. “It [the lending] is not intended to compete with commercial banks or private sector banks. What it is intended to do is fund the projects that wouldn’t happen if the private sector won’t fund them. For example, infrastructure projects have very long investment period, commercial banks are unlikely to wait ten years for a road, and that’s where we can use export credit to provide extra tenure,” Penney added.
He stressed that the UK government is keen to increase two way trade with Pakistan, which is currently at £3.1 billion.
“Pakistan’s exports to the UK are £1.9bn and the UK’s exports to Pakistan are £1.2bn so you can see the UK is an important export market for Pakistan.”
“Once the UK leaves the EU, it is to replicate the [GSP+] agreement on the same terms and conditions,” he added.
UK firm Mott McDonald has been appointed as the lead consultant for the 5th extension hydropower project at Tarbela Dam, a project that Penney visited during his trip to Pakistan.
Sharing his impression following a meeting with the OICCI, which has the largest number of UK companies by membership, he said that studies done by the chamber show the country [Pakistan] offers 9-10 per cent returns in terms of profitability. “The point that they were making is that Pakistan offers a lot of opportunities for companies to invest, there are good returns to be made,” he said. “Those returns are quoted on the stock market for listed firms in Pakistan, this is certainly evidence that it’s a very attractive market for investment,” he added.
Noting that one of the areas that the UK government is focused on is how to get more companies to enter Pakistan. “It is encouraging more UK companies to invest in Pakistan and do more business. I think that’s something we are focused on how do we sell Pakistan’s investment story internationally. There are many opportunities of international companies to do business here.”
Published in Dawn, June 26th, 2019