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Italy Pakistan Relations are Stronger than Ever Interview with His Excellency Stefano Pontecorvo Ambassador of Italy in Pakistan

By: Noreen Haider
PO: An Ambassador has a lot on this plate as a representative of his country. What do you consider your most prioritise area of work in Pakistan?

SP: Apart the most obvious, brining the two countries closer together and the way you do it is through enhanced economic ties, cultural ties, enhanced political ties and in our case defence ties.

PO: How do you see Italy Pakistan economic relationships now and in the future?
SP: I am very bullish on Pakistan and have very high expectations from it. Whenever there is a government that comes with a reform mandate, it is always welcome . Of course there are some problems which all new governments face regarding macroeconomic imbalances but once you overcome that you can flourish.

As far as the bilateral relations are concerned we have almost tripled our trade volume. Today eight out of the ten big companies in Italy have come to Pakistan and are currently working here. In the defence sector Pakistan has become a very reliable partner. Things are looking good. Italian companies here in Pakistan are spread over a lot of fields including construction material, engineering, automotive industry, steelmakers, marble and mining and textile machinery and doing very well.

PO: How would the foreign companies coming to Pakistan help in improving the economic situation, trade imbalances and manufacturing in Pakistan ?
SP: All countries think that they are facing unique problem but it is not like, half of the countries in the world are facing the same problems. There is a need of improving what is available to the consumer and providing a lot of things that the consumer does not have and reinforcing your own industrial base at the same time.

One of the ways to do it, which the governments here have been doing is through inviting foreign companies. The situation regarding international companies has improved considerably and hopefully with the situation in Afghanistan becoming better more and more companies will come in the region.
There are still a number of unresolved issues but I don’t think those will stand in the way of Pakistan becoming more attractive as a 220 million consumers market. That and the growth of disposable income in this country is very encouraging.

PO: Is the current economic situation worrying for the international investors and companies as the purchasing power of average Pakistani is decreasing and the rupee seems to be deteriorating continuously.
SC: The average consumer in Pakistan is a low income consumer and is only indirectly touched by the deteriorating value of Pak Rupee. As concerns the rest Pakistan has an enormous informal economy which is more than 60% of the total economy. In this situation you cannot have credible macro economics statistics. The statistics provided by the government cannot be taken as absolute value. When even 60% of the economy is undocumented you are doing a lot of guest work. But there is a lot of work and a great deal of potential in Pakistan which is very promising.

PO: You say that Pakistan attracts a lot of Italian companies. Does it include Defence Industries as Pakistan spends a great deal on Defence products also.
SP: Italy has trade relations with over seventy countries. You sell your weapons and your defence systems to whoever buys them as you sell your cars to whoever buys them and same with all products and in that way, yes Pakistan is a very attractive market.
As far as Italy is concerned last year we exported goods worth 600 billion dollar all over the world. These include around eighteen percent food and fashion, Pharma, energy products etc out of that only 5% is share is of defence products. The main staple of our exports, as is also here in Pakistan, remains to be machinery including machinery for extracting mines and Minerals, Textiles, Auto Industries and in fact machinery for all sorts of industries.

PO: So machinery is the staple of the Italian exports in Pakistan ?
SC: We produce some of the best machinery in the world and if you visit the industrial cities of Pakistan like Sialkot they are full of our machines. We produce the best textile machinery as well as the machinery for marble and minings. We also have a sizable share in the automobile parts industry as well as the pharma.

PO: Italian machines are good but expensive, so how do you say that they would actually be cost effective as compared to newer, cheaper versions available as competition?
SC: We have found out with the advancement in entrepreneurship, the entrepreneur is shifting from calculating the purchasing cost to operational cost, which means how much will that machine would have cost him to operate in 20 years. If you take that view then the Italian machines are the most cost effective and convenient in the world.
They just keep running trouble free for thirty forty years. If you take the example of Ghalib Steel in lahore, they have Italian Machinery, Bossi, which is forty years old which was bought second hand thirty years ago and it still runs like clockwork. You make an initial investment which is twenty to thirty percent higher cost compared to those made by other countries but ten years down the line you realise that they are not only more efficient but you make more money month by month.
The thing is that your business plans, production plans, are all made according to the machinery that you have. Machinery is at the core of production. If the Machinery breakdown or is no longer able to produce what the market wants then you have to buy or upgrade it to meet the new market demands. The machines that Italy makes has built in design for upgrading. They are already at the top of the line and they are flexible enough to adjust to new needs.
For example, At a certain point the denim industry went from the classic denim to elasticised, those who had italian machinery for example Naveena Denim in Lahore, a real entrepreneur, only had to change the mix of raw material into the machine and it worked perfectly. That is what technology is all about to be able to adjust and adapt to what the market wants. That is why we are the most successful country in the world with regards to machinery.
Another example is Master Tiles which can be compared to any big company in Europe. The owner has a vision which I have rarely seen. He has 160 million US dollars of Italian machinery. He is the ninth biggest tile maker in the world. This gentleman does not even have a warehouse because as soon as the tiles are ready they are loaded in the trucks sometimes still warm from the production line. So the Italian machinery is at the heart of their production and they are producing world class products.

PO: How are you working to promote the cultural ties between Italy and Pakistan ?
SC:Pakistan has become very important for italy and we recently have had our cultural budget doubled. I believe there should be more cultural activities and and as there are a lot Pakistanis who have families migrated to Italy and a lot of people in pakistan now can speak and understand italian also and enjoy the music and other arts.

PO: There is increasing interest of Pakistani students now for Italian universities. How are you facilitating them at present.
SC: We have some of the world’s best technological institutions and colleges like the polytechnic Institute of Milan, the Polytechnic Institute in Turin and many more. Last year we received around 2000 applications and we gave two hundred student visas.Italian universities are very low cost but not low quality. The students that get the admission and visa naturally have the right to work in italy. But it is unfortunate that sometimes the students take admission but do not appear in the universities and that is causing some problems. It is more unfortunate actually because in the Italian universities wherever they have pakistani students, they are among the top achievers.

PO: You are very active on Social Media. How is that helping you in reaching out to more Pakistanis.
SC: SM is helpful. You can immediately respond to people. you can find out what the problems regarding the counselor services and I have been able to find out some issues through the complaints that I received. It is not always pleasant also but you have to accept that also.
I have great hope and expectations from Pakistan and it is taking a lot of tough decisions which will help it come out and become stronger.