“I had great expectations but Pakistan is always more than what I expect,” said the Italian ambassador Andreas Ferrarese in a recent meeting at Dawn’s office. Amid the usual flowery words of Pakistan being a country with great traditions and a young population with positive energy, the ambassador expressed interest in deepening ties between the two countries.
At $1.5 billion, Pakistan-Italy trade is a below its potential. “I was in Lebanon and with its population of four million people, trade was $1.2bn. So there is a lot of room for bilateral trade to grow.”
Pakistan’s main exports are of textile, leather, rice and ethanol. They stood at $731m in the last fiscal year. Imports were $521m. They were mostly of machinery, petroleum products, vehicles, iron and steel and pharmaceuticals.
“We have a community of 200,000 Pakistanis in Italy. About 140,000 are documented and 60,000 are being documented,” said the ambassador. With families back at home, Pakistanis in Italy sent remittances of $452.8m in 2020, accounting for a fifth of inflows from the European Union, according to data from the State Bank of Pakistan (SBP).
So why is Italy with an economy roughly seven times of Pakistan wooing us? The answer lies in Pakistan’s potential to modernise its industry, particularly the textile sector, great scope for green energy, big and growing consumer market and its cadre of the wealthy.
Speaking from his experience as the person who used to write the official travel advisory of Italy, he spoke of the ways Pakistan can attract tourists.
“Pakistan is not for the middle man. Keeping in mind certain behaviours that may offend local sensibilities, we do not pose major limits for Italians wanting to travel here,” he said. Italians have extreme tourists such as those wanting to climb the Himalayas. Outlining how the middle class can be attracted, the ambassador spoke of the need for infrastructure.
‘Twenty years ago, the salary in Pakistan was 10pc of the Italian salary — now it is 45pc,’ says Italian ambassador Andreas Ferrarese
“People want a comfortable hotel in a scenic spot with English speaking staff and transport available to buy your Pashmina shawls. Even those who are not very rich can then come.”
But it is not a one-way street.
Italy wants to attract rich Pakistanis who spend their summers abroad as well.
“You have 30m people that are rich,” he said, speaking about the competition among European countries that vie for Pakistani tourists — leisure as well as health. Well-off people go to foreign hospitals. “Why should someone go to London for an operation and not Milano,” he queried.
“About 5,000-6,000 Pakistani tourists visit Italy every year. Most go to other countries and that is not positive for us.”
The student outflow
Given that about 30,000-35,000 students go abroad to study every six months, countries are interested in attracting students from Pakistan. Until recent times, Italian universities taught in the national language, which was a bottleneck.
But now more courses are being offered in English. Italy offers good public-sector universities that cost roughly as much as a degree from the Lahore University of Management Sciences or the Indus Valley School of Arts and Architecture.
However, Italy is still working on developing an infrastructure to process large volumes of students coming in. Sifting through actual students and those using education as a ploy to find a way into the country to settle and flip pizzas is an arduous labour-intensive task, the ambassador explained. While a foreign student is allowed to work 18 hours a week, they are not allowed to enter the job market on a student visa.
An image problem
In the ambassador’s view, Pakistan’s real problem is its image. “Italy has the mafia but it is not like if you went into a restaurant someone will shoot you. The mafia is 20,000 people while the rest of 60m people are normal”.
Positive messages would strengthen your image, he explained. “There are more dangerous countries that I have worked in but their image is an exotic one."
Nor is the salary difference as marked as one would assume. “Twenty years ago, the salary in Pakistan was 10pc of the Italian salary — now it is 45pc,” said the ambassador, much to our surprise. “If you want a quality worker, you have to pay. At the same level of skills, the salary is not so much different.” Add to that the fact more people speak English here than in, say, Vietnam, he added.
Importing Italian machinery
“When people think of Italy, they think of fashion. But our main voice in exports is robotics and machinery — all the textiles in China are made with our looms,” said the ambassador. An indicator of Pakistan’s strength in the global textile market, Italy is enticing Pakistani manufacturers to opt for Italian equipment.
In 2019, according to data by Trade Maps, most of the imports were sourced from China and Germany, followed by Japan and India, with Italy ranking fifth. “Our machinery is more expensive, but it is of the highest quality,” explained Mr Ferrarese.
Recently, two technology centres have been established with Italian cooperation — the Italy-Pakistan Footwear Technology Centre in Lahore and the Italy-Pakistan Textile Technology Centre in Faisalabad — for which latest machinery has been donated by Italy.
However, this generosity is prompted by the hope that these donations will spark interest in companies that will then import them from Italy. “Pakistan is the middle-market, not the lower market. You have a taste for quality,” he said. While manufacturers today may be using labour-intensive machinery, newcomers will aim higher and opt for Italian imports,” hoped the ambassador.
Published in Dawn, The Business and Finance Weekly, February 15th, 2021