A trade delegation comprising 28 businessmen belonging to different sectors of economy would visit Ukraine from December 6 to 10, Engr. M. A. Jabbar, Honorary Consul General of Ukraine, told Business Recorder here on Monday.
He said business sectors of Pakistan are being represented from manufacturing, import and export groups including but not limited to import of minerals such as calcium, fluorite, magnetite, manganese, herbal medicines, exports of auto parts and filters, imports of steel and steel products, home textile, institutional lining, surgical and dental instruments, sports goods, fruits and vegetables, imports of construction machinery, footwear, rice, carpets, ferrous products, industrial goods and machineries, exploring oil and gas resources, textile products, financial services, service hotel industry and satellite communication to name a few.
Elaborating the visit he said that since the formation of Pak Ukraine Business Council of FPCCI, one of the objective was an early visit of Ukraine for bilateral introductions and understandings of each other's economy.
Engr. Jabbar, who is also in-charge of R&D and WTO cell in FPCCI and former Vice President of FPCCI and Chairman of the biggest and oldest industrial estate of Pakistan namely Site Association of Karachi, said that since the elections of Pak Ukraine Business Council, the Council has been receiving ideas and suggestions on how to negotiate the increase in the present business volume of both the countries which is limited to just over a $100 million dollars and take it to $500 billion dollars.
He said that with the elections of Nadeem Khalid and Muhammad Farooq Afzal, as Chairman and Vice Chairman of the council, respectively, the research and analysis had gained momentum due to the experience of these persons of conducting business in Ukraine and in other countries which were earlier part of the former Soviet Union. This visit manifests the serious desire to promote bilateral trade, he added. The delegation is being led by Chief Executive of Trade Development Authority of Pakistan (TDAP) and facilitated by Ambassador of Pakistan in Ukraine, Salim Maila and Pakistan Ukraine Business Council of FPCCI.
He said that FPCCI had advised him to represent the apex trade body and further asked him to have a proactive role to seek the co-operation of counterpart Ukrainian Chamber of Commerce & Industry so that in future the businessmen could become catalyst in promoting business ties between the two countries by analysing the present import tariffs, technical barriers to trade and non tariff barriers and other issues, so that the understanding and resolution of the same towards promoting business of both countries is made possible.
Engr. Jabbar is also considered a research analyst of repute and has been associated with various study groups and acknowledged as a recurring sort speaker in the forums related to the improvement of trade between Pakistan and other countries and amongst Pakistan and other group of countries.
He further apprised that Pakistan was already enjoying lot of co-operation on its defence needs in armoured vehicles, and other navigational needs for combat forces in defence. "This area needs to be expanded further through participation of private sector in tendering requirements of defence by equally preferring participation of Ukrainian origin defence equipment," he added. In other areas, Ukraine has the strength of technology, engineering and technical services for coal mining, power generation, heavy-duty machinery, aerospace including avionics and aerodynamics.
He said that his own research would support for a preference to create business friendly environment, as hardly few countries would like to share the technology and teach the HR during the transitional period of transfer of technology. Ukraine has a history of confirming not only transfer of technology in Pakistan but as well as training of human capital of Pakistan wherever they have and had opportunities to integrate with the business requirements of the country.
The present renovation and reconstruction of coke oven batteries of Pakistan Steel Mills and earlier participation of Ukraine would be an instant example to quote for. He said that the same trend was also confirmed for supplies in the defence sector. He said, "the cost of knowledge and secrets of technology has a very big number in the total cost of the product and we have to spend a considerable cost on import of technological products. If we try to find some future arrangement, we could not only procure our requirements which are technological oriented from Ukraine but we could be blessed with the technology transfer and training of the human resources for manufacturing the same technological economy of Pakistan with lesser cost. This transfer of technology would also help us in improving our strength in engineering sector, which is almost all dependant on imports integrated with higher cost of knowledge and technology."
The economic overview of Ukraine would suggest that Pakistan could meet its import requirements of commodities like steel and chemicals. Pakistan could also extend its present and as well as install new steel manufacturing units with the bilateral arrangements to be agreed between both countries. This would also be necessary in the interest of the country, which has now considerable existing raw materials of iron ore. The transfer of monazite economy to Balochistan through increased use of its iron ore, likely to be used by the new steel-manufacturing units has a very big horizon considering the interest that Pakistan should have.
Ukraine, which has now almost completed the transition to a market economy, now looks like to have returned to solid economic growth with about 4 percent of GDP. Ukraine has a trade volume of more than $100 billion USD and could accommodate Pakistan's exports, once the bilateral trade promoting culture is accredited by making arrangements in reducing the tariff, dismantling of the other impediments other than tariff which are commonly classified as TBT and NTB.
Major industries of Ukraine include coal, electric power, ferrous and non ferrous metals, machinery and transport equipment, chemicals and full processing to name a few. The import profile of Ukraine could absorb Pakistan's exports for its needs which is also exhibited by the data to speak as requirements of Ukraine for food products such as rice, textile needs and fruits and vegetables, sports goods, surgical instruments.
Pakistan could increase its present exports by increasing the product code, which presently is limited, and as well as cross the present exports of about 250 million USD recorded in year 2010. On the analysis of data one could see that even in the present Pakistan exports to Ukraine in limited number of product codes has a very big indicative potential trade of about USD 2.5 billion.
Simple conclusion would lead that share of Pakistan's exports in the available potential is 1/10th of the requirements of Ukraine which she meets by importing similar exports from other countries. Overall, all products exports of Pakistan has a registered figure of 66 million dollars in the indicative potential trade of all products as more than USD 21 billion. Such gap analysis would need to be further refined to see that why we have a little share in exports of the same products in which Ukraine indicates a very high number of import figure for meeting its domestic requirements.
He said Pak Ukraine Business Council has pledged to work on these figures once it's members return from the visit. Engr. Jabbar said that during the visit the delegation would have a meeting with Turkish Ukrainian businessmen association, visit of Ukrainian Chamber of Commerce & Industry, and visit American Chamber of Commerce in Kyiv followed by visits and briefings at reformed club Kyiv.
He said apart from the above mentioned schedule he has been briefed by Embassy of Ukraine in Islamabad that meetings have also been arranged with first Deputy Prime Minister and Minister of Economy & Trade, Deputy Prime Minister, Minister of Foreign Affairs, leadership of Presidential Administration. "This is a very good opportunity because Pakistan needs inflow of investments with technology transfer and HR training. On the energy side, the deficient Pakistan is facing challenges in managing the energy needs of the economy. Deficiencies of gas and electricity are causing reduction of 2 percent of GDP in the opinion of empirical study by Asian Development Bank," he added.
The Thar coal is a project, which needs external inflows, as it has the potential of supporting and sustaining the future economy of Pakistan. In this visit, he said, delegation members could apprise the top political hierarchy that energy projects based on Thar Coal have been promised 21 percent internal rate of return (IRR) used in budgeting to measure and compare the profitability of the investment. This promised position of higher return on the Thar coal energy based projects have been notified on the basis of decision of economic co-ordination committee (ECC) of cabinet. This point could be synthesised. Moreover the investments are protected and repatriation of profits and other incentives as a national policy originating from the working of board of investments could add to create further strength for motivating the political hierarchy to encourage investors of Ukraine with the support of the government in the mode and manner which helps in inflows, picking up joint ventures in Pakistan and managing the participation of capital works.
He said that public private partnership law in Sindh itself has started yielding results and Ukrainians could participate in development of infrastructure supported by guarantees of Sindh government to make the cheaper charge based financing in the projects. This will definitely be of greater interest of the Ukrainians who have capacity and capability to participate in ongoing development of infrastructure. This is a matter of understanding each others position by increasing the people to people contact and business to business conversations to help the governments of both sides to show the needful liberalisation towards promoting bilateral economic interests.
Engr. Jabbar on the point of salient features relating to issues and proposals for discussions and briefings said that he would suggest following tabulated position. Issue: Slow pace of economic co-operation, market access, diluted communication of business communities of countries, business councils, payments for imports and exports, access for Ukrainian buyers to Pakistani manufactured merchandise, business to business contacts, and energy crises in Pakistan. Challenge: establishment of Pak Ukraine Joint Ministerial Commission (JMC), higher import tariffs, TBT and NTB, needful context between chambers and trade bodies of both countries, need to create Joint Business Councils, establishment of banking system in both countries, building infrastructure in Kyiv, establishment of warehouses and display centers, visa regime has to be agreed for business community based on bilateral negotiated requirements of the visa, and Thar coal needs to be properly marketed to Ukrainian government and investors based on 21% Internal Rate of Returns.
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