‘Pakistan-Sri Lanka trade zooming to US$ one billion mark’

Shirajiv Sirimane

TRADE: Trade between Sri Lanka and Pakistan is growing and would reach the US $ one billion mark in the next five years, the High Commissioner for Pakistan in Sri Lanka, Shahzad A. Chaudhry said.

Speaking at an event organised by the National Chamber of Exporters last week in Colombo he said there is a sharp increase of trade after signing the FTA between the two countries in 2005.

He said trade, which was around US $ 35 million before signing the MoU, passed the US $ 200 million mark after the MoU. “Though this is a sharp increase it is not at all sufficient. Both countries have lot of potential that has been underutilised,” he said.

In the first six months of this year trade has passed the US S 285 million mark with the trade balance being in favour of Pakistan. Exports to Sri Lanka in the first six months were US $ 285 million.

The High Commissioner said most of the countries in the region are trying to do business with Europe and have ignored the potential in regional trade.

Chaudhry said the hospitality industry is an area that has been untapped. “Some of the hotels in Sri Lanka are top of the line and are sometimes better than what they have to offer. The hospitality in Sri Lanka too is better than what is available in Pakistan,” he said.

Buddhist tourism too has tremendous potential that is yet to be exploited.

Another area where there are opportunities for Sri Lankan entrepreneurs is the retail trade in Pakistan. “Pakistan has a growing upper class with relatively high per capita incomes.

We do not have supermarket chains such as Cargills, Keells, Arpico and Laugfs and Sri Lanka could look for opportunities in this area,” he said.

While Pakistan produces the best textiles and yarn they cannot match the high quality of Sri Lankan apparels. “Therefore both countries should share knowledge in these areas and joint ventures would be very gainful for both countries,” he said.

“Pakistan is now the most investment-friendly nation in South Asia. Business regulations have been profoundly overhauled along liberal lines, especially since 1999.

Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100% of equity participation is allowed in most sectors (local partners must be brought in within 5 years and contribute up to 40% of the equity in the services and agriculture sectors). Unlimited remittance of profits, dividends, service fees or capital is now the rule.

World Bank report published in late 2006 ranked Pakistan (as 74th) well ahead of neighbours like China (93rd) and India (134th) on ease of doing business.

He said that Pakistan’s economy is growing at 7 percent and last year they had 6 billion foreign direct investment. The automobile industry too is growing and last year 160,000 units were manufactured.

“We can assist Sri Lanka in engineering, fruit and vegetables dairy sectors and the embassy staff in Colombo would assist any local exporter”, he said.

Pakistan’s KSE 100 Index was the best-performing stock market index in the world as declared by the international magazine “Business Week”. Pakistan exports rice, cotton, fish, fruits, and vegetables and imports vegetable oil, wheat, cotton, pulses and consumer foods.

The country is Asia’s largest camel market, second-largest apricot and ghee market and third-largest cotton, onion and milk market.