More UK companies expected to explore wealth of opportunities in South Asian nation. PHOTO: AFP
LONDON: Last year, UK Prime Minister Theresa May appointed me as the UK’s trade envoy to Pakistan. Recently, I completed my second visit in that role and brought a trade delegation including some of the UK’s leading companies from the fields of financial, professional and legal services.
This was the first UK government-led trade delegation to Pakistan in almost a decade, a testament to the improving security situation in Pakistan and increasing appetite of British companies to do business in this largely untapped and unsaturated market.
The two countries are, of course, established partners, with a long, shared history. But there are significant opportunities for future cooperation. As trade envoy, I want to build on the strong foundation and to help forge an exciting, shared future.
I want trade to play a key part of this agenda and it is with an eye on the future that we chose infrastructure projects in Pakistan as the focus for the visit.
Pakistan has huge infrastructure challenges, whether in energy, transport, communications, building schools or hospitals, to meet the needs of a population set to increase to 400 million people by 2050. The UK can play a role to help Pakistan meet those challenges. Pakistan is an impressively dynamic country with a young and fast-growing population which already exceeds 200 million. A middle class is emerging numbering tens of millions – far bigger than the entire population of many countries.
This presents enormous opportunities for both the UK and Pakistan on which I want to capitalise. We want to see bilateral trade increase significantly over coming years.
Increasingly UK companies are exploring new markets for growth. There are real and significant business opportunities in Pakistan, but the challenges should not be underestimated.
The World Bank’s Doing Business Report for 2018 ranks Pakistan at 147 (out of 190 countries) which is a drop of three ranks from 144 in 2017. Pakistan’s reputation as a place to do business is mixed, with red tape, weak protection for commercial disputes and intellectual property and high levels of corruption.
For UK businesses to thrive here, the conditions need to be conducive to investment. They want tax and tariff regimes to be predictable, transparent and increasingly automated, and to be able to resolve commercial disputes efficiently.
The government of Pakistan has taken steps to reform the business environment, with support from the World Bank and UK government through the Department for International Development.
I hope that the government continues to work on these measures to offer an operating environment and regulatory framework that is more attractive to foreign investors.
GSP Plus status
To continue to meet its economic potential, Pakistan also needs to increase its own exports. To support this agenda, the UK government has made clear its ambition that Pakistan should retain the same levels of access it currently receives to UK markets under the EU’s GSP Plus scheme, with an aim to enhance that trade arrangement further once we have left the EU.
For us to be able to do this, it is important that Pakistan continues to make progress on its international obligations in order to retain its GSP Plus status, including protecting minority rights and steps to reduce the scale and scope of death penalty.
Although the growing population brings opportunities, it also presents several challenges, including for the economy, environment and water supply. Addressing these challenges early will help set the groundwork for Pakistan to become an upper middle-income country.
Building adequate infrastructure is an important part of this prosperous future, and the government of Pakistan is prioritising infrastructure projects across the country, recognising the importance of improving and expanding infrastructure services for sustaining economic and social development. This, of course, includes the China-Pakistan Economic Corridor (CPEC), a series of Chinese-funded energy and transport infrastructure projects estimated to be worth up to $54 billion, which presents opportunities for Pakistan and the wider region.
Nevertheless, Pakistan’s infrastructure requirements go beyond even CPEC and it is clear there are opportunities for UK companies to participate in projects in this sector, particularly in the UK’s strength areas of professional, legal and financial services.
As a friend of Pakistan, I used my time here to encourage policymakers to prioritise efforts to create the conditions where businesses can thrive and to attract foreign direct investment. This is important for the UK and Pakistan to increase bilateral trade and create jobs together.
With the right conditions in place to allow foreign companies to flourish here, I strongly believe that we will see more UK-based companies exploring the wealth of opportunities in Pakistan. These are the same conditions required for Pakistan’s own business and manufacturing sectors to flourish and which will allow the economy to grow in order to meet the challenges of tomorrow.
The writer is the UK prime minister’s trade envoy to Pakistan and a member of UK parliament
Published in The Express Tribune, February 26th, 2018.
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