ISLAMABAD: Federal Minister for Commerce and Textile Mohammad Pervaiz Malik has said that Pakistan and Indonesia enjoyed close diplomatic, economic and trade ties based on religious affinity, mutual trust and cooperation rooted in history.
Our warm political ties transformed into a strong economic bond when during the visit of the President of Indonesia in November 2005, both sides signed the Comprehensive Economic Partnership Agreement (CEPA), the minister addressing the Pakistan- Indonesia Business Forum here at a hotel.
He said that under the umbrella of CEPA, both sides entered into a Preferential Trade Agreement in 2012 which has been operational since 2013. Since then bilateral trade has been on an upward trajectory, rising from US$ 1.392 billion in 2012 to US$ 2.375 billion in 2016-17, he said.
The minister said that according to economic forecasts by international financial institutions, Pakistan’s economy could now look forward to steady growth in the coming years.
International rating agency, price water house Coopers has recently forecasted that Pakistan could become world’s 16th largest economy by 2050, overtaking countries like Italy and Canada, he said.
Morgan Stanley, Forbes, Bloomberg, Economist and Washington Post, all have been expressing similar optimism about Pakistan’s future economic growth.
To communicate this exciting reality to the world, we have devised a new brand: Emerging Pakistan. ‘Emerging’ is a word that carries with it a sense of promise, a positive outlook on the future, he added.
He said that backed by a rising economy, vast natural resources, and a young population, Pakistan is a dynamic nation that is brimming with potential.
“We are working to restore confidence of the investors/ businessmen, both local and foreign through our government’s pro-business and transparent policies, the minister said.
Pakistan offers liberal investment opportunities and there is a keen interest by investors of several major international companies towards investing in Pakistan.
Major sectors where opportunities exist include energy, infrastructure, housing, agriculture and others. However, the trade growth has been one-sided. Whereas Indonesia’s exports to Pakistan increased from US$ 1.196 billion in 2012 to US$ 2.238 billion in 2016-17, Pakistan’s exports to Indonesia unfortunately declined from US$ 196 million to US$ 137 million during the same period.
He said that this not only raised serious questions over the viability of this PTA but also threatened the original plan to graduate to a comprehensive FTA between the two countries.
The minister said that convinced of the great potential the Indonesian market holds for Pakistan, Ministry of Commerce embarked on an endeavour to make the PTA mutually beneficial.
“We went into a review of PTA and sought cooperation of our Indonesian brothers in making this agreement a win-win proposition, Pervaiz said.
He said that Indonesia had been unilaterally, granting zero-rated market access on 20 priority items of Pakistan’s export interest and “I am hopeful that this visionary gesture would not only bring some semblance of balance in our bilateral trade but also pave the way for our future cooperation.”
The minister said that Pakistan’s economy has been on a path of recovery since 2013 and during the last fiscal year the GDP registered growth of 5.3 %, the highest in last ten years.
The government’s effort to restore peace and stability and meeting energy requirements has helped Pakistan take strides towards economic prosperity.
He said the Large Scale Manufacturing in Pakistan recorded growth of 5.6% in fiscal year 2017, and the momentum continues in the current fiscal year.
Pervaiz Malik said the overall business sentiment in Pakistan has significantly improved which has encouraged a number of firms to pursue expansion plans.
Foreign Direct Investment (FDI) in Pakistan has seen an upward surge and is expected to rise further with impetus provided by China Pakistan Economic Corridor related projects.
The business community of our two brotherly countries must have more frequent interactions, harness the existing linkages and develop enduring partnerships to enhance our bilateral trade and investment relations, he said.
He said the events like the Business Forum are a step in the right direction and “I commend the efforts of the Indonesian Embassy and Trade Development Authority of Pakistan for organizing the B2B interactions over the last two days.While addressing to business forum, Minister of Trade, Republic of Indonesia Enggartiasto Lukita said that Pakistan and Indonesia have strong business, trade and religious ties established since seven decades.
He said that Pakistan and Indonesia must increase business and trade ties in electronics, palm oil, food processing, agriculture and information technology for enhancing their trade.