IN an encouraging development, Pakistan’s exports to the Middle East witnessed a growth of 28.98 per cent to $1.257 billion in the first five months of the current fiscal year against $974.50m from a year ago. According to the data released by the State Bank of Pakistan (SBP), there was an increase in demand for Pakistani products from countries like the United Arab Emirates (UAE), Saudi Arabia and Kuwait and exports to the region might increase further following signing of free trade agreement with the Gulf Cooperation Council (GCC) countries.
Pakistan has all along maintained closer ties with Arab countries with which it has not only cultural and ideological linkages but they are also the third largest trading partners after the United States and the European Union. A major concentration of Pakistani manpower abroad is in Gulf countries and the money sent home by them constituted a bulk of the country’s growing remittances. In fact, there is enormous potential to solidify the economic relations between Pakistan and Arab countries but, experts point out, Islamabad remained focused on maintaining strategic ties and gave no priority to the economic aspect. Pakistan’s policy has fundamentally been focused on building cultural, religious and political ties. There was tremendous opportunity for Pakistan’s economic growth through consolidation of trade, investment and economic ties with the GCC countries but unfortunately we focused more on securing loans and packages than basing the bilateral ties on firm economic foundations. It is mainly because of this that our exports to Saudi Arabia and the United Arab Emirates were not broad-based as they were limited to export of rice (semi- or wholly milled), bovine carcasses and half carcasses, tents, textile materials, etc. This is despite the fact that there was a huge potential available for enlarging Pakistan’s exports to Saudi Arabia, apart from textile and rice, in pharmaceutical, sea food, meat, edible fruits and vegetable, dairy products, leather goods and information technology. There are also trade barriers that create hindrance in exports to Saudi Arabia related to compliance of standards, lack of information, lack of commercial activities etc between both the nations. A study carried out by the Federation of Pakistan Chambers of Commerce and Industries (FPCCI) emphasized the need to negotiate trade impediments related to compliance, standardization, sanitary and phytosanitary standards (SPS), technical requirements, conformity assessment and rules of certificates of origins for enhancement of Pakistan’s exports to Saudi Arabia. Similarly, Pakistan’s top sectoral exports to the UAE include cereals, articles of apparel and clothing, meat and edible offal showing a lack of diversity. It is partly because of lack of proper planning, hard work and innovation that despite tremendous potential to boost its trade and investment, Pakistan is today facing enormous financial and economic difficulties looking here and there for loans that have already assumed a serious dimension. Pakistan can benefit a lot and improve prospects of its growth and welfare of the people if its economic card was used wisely. The country should, therefore, focus on diversification of exports, creation of a favourable environment to attract substantial investment and revitalizing its workforce. Apart from imparting relevant skills to meet the requirements of the Gulf market, especially Saudi Arabia, which has embarked upon an ambitious plan to modernize the country’s infrastructure and establish new cities, the Government should also take more steps to improve the working of the remittances’ sector. It is argued that one of the reasons people do not prefer banks for remittances is because of their low coverage in rural areas and this drawback can be overcome through a partnership between banks and the Pakistan Post, which has its network throughout the country. For the Middle East countries, food security is fast becoming a high-level concern, primarily because the region is suffering from water scarcity and arid weather conditions. This is why GCC states are now moving away from self-sufficient agricultural policies to a more comprehensive plan which includes imports to guarantee food security. This potential needs to be tapped in a comprehensive manner by the newly created Special Investment Facilitation Council (SIFC), which has already shown interest in attracting investment from the Gulf countries in the agriculture sector. Through the intervention of the Council, hiccups in the way of Saudi investment in Pakistan have been removed with agreement on legal framework but one hopes the investment would be in new ventures and not merely on acquisition of the existing assets.
