'Trade links between Pakistan and the UK should rise,' British Deputy High Commissioner

Francis Martin-Xavier Campbell is a British diplomat, currently serving as the Deputy High Commissioner to Pakistan. Having joined the British Diplomatic Service in 1997, he has been posted to the European Enlargement Unit of the Foreign and Commonwealth Office and the United Nations. He has also worked as Policy Adviser to the Prime Minister, Private Secretary to the Prime Minister and as Senior Policy Director with Amnesty International, before his current deputation.
Francis Campbell recently sat down for an exclusive interview with BR Research. The following transcript contains excerpts from this encounter.
BR Research: What are the most recent developments in terms of enhancing trade and investment ties between Pakistan and the United Kingdom?
Francis Campbell: A Bilateral Investment Treaty was signed between Pakistan and the United Kingdom in 1994. Recently when Pakistani Prime Minister Yousuf Raza Gilani visited the UK, an important development for trade and investment ties between the two countries took place as the two countries jointly launched the Trade and Investment Road Map.
Under the new road map we have renewed our commitment to increase bilateral trade to 2.5 billion pound sterling by 2015. We have also set various milestones with regards to exchanges and bringing in business. Perhaps the biggest barrier to increasing the flow of investments from the UK to Pakistan is that of perceptions. So we have put in a lot of effort into trying to change these perceptions in the UK, to alert people about opportunities here and to form a bridge between businesses in Pakistan and the UK.
Getting people to visit Pakistan for the first time is the key. Once they are here, then preconceived notions are dispelled and people are able to appreciate the opportunities in Pakistan. Trade numbers between the two countries are good; last year British exports of goods to Pakistan went up by 16.2 percent. Over the same period, Pakistan's exports to Britain went up by 13.9 percent. In the first three months of this year, we are also seeing an increase of about 13 percent over the same period of last year.
But, what is very important to highlight is the trade that can grow leaps and bounds beyond these levels. We need our trade and investment links to be at par with our political and diplomatic links. There are huge cultural and educational exchanges between the two countries.
At any given time there are about 30,000 Pakistani students at British universities, in addition to which there are thousands of others preparing for various certifications and examinations here in Pakistan. We must now translate these links into more robust business ties between the two economies.
Currently we are working with a double mandate on the business front. We have always played a pivotal role in drawing the attention of investors in the UK to opportunities in Pakistan. Now we are also highlighting Britain as a destination for investments.
We have a very long tradition of investing in Pakistan. More than one hundred of our companies are operating successfully in this country and we want to highlight that. But the bulk of our economy now is the small and medium enterprises.
So, we want to work with the SME sector to help them progress and expand. Then there are sizeable transfers from the British Pakistani community to this country and we want this trend to be sustainable and mutually beneficial for both countries. While PM Gilani was in Britain; he also met with members of the British Pakistani community.
BRR: In your opinion what specific areas offer the most lucrative opportunities for prospective investors from Pakistan considering investing in UK?
FC: Information and communication technology is one sector among many others where even the past experience of Pakistani companies such as Netsol has been very encouraging, both in terms of the prospects for that business and for generating employment in the UK. Then there are excellent opportunities in food production and food processing, textiles and fashion design, agriculture, brand development and marketing, financial services and legal consultancy.
Companies in Pakistan should consider establishing their European headquarters in the UK, which would grant them easy access to the world's largest market for goods and services. All Pakistani companies that are well established here and are now looking to leap in to markets in Europe can really use their presence in Britain as a launching pad for Europe.
To give you an example of the opportunities in the education and professional development sector, let me mention here that the Beacon House School now has schools in the United Kingdom, so you can see that there are existing links that can be strengthened for mutual gains.
Tech city in London shall be the European equivalent of Silicon Valley and firms specialising in software development will find that this area is the perfect incubator for expanding their business with the help of tax breaks and technology grants.
The Halal food market is huge and growing market in Britain. Pakistani companies that choose to invest in the UK and establish a presence there, can not only count on this sizeable market; but also use the technology and knowledge they gain from Britain to improve operations in Pakistan. For example, consider the fact that in some of the harvests in Pakistan up to 40 percent of the agriculture produce is lost because of the lack of refrigeration systems and logistics infrastructure.
If you have potential investors from Pakistan coming into food processing in the UK, there are higher changes of technology transfer back to Pakistan which would in turn be vastly beneficial for Pakistan's agri-sector.
It is important to realise that any increase in investments from Pakistan to Britain should not be considered a loss for the former; rather such flows will be mutually beneficial in terms of helping Pakistani businesses grow and improve global competitiveness.
BRR: British Deputy High Commission recently hosted a reception for key stakeholders of Pakistan textile industry. What do you hope to accomplish in terms of textile sector?
FC: The reception for the launch of Karachi Fashion Week was attended by more than four hundred designers, models, textile manufacturers, exporters and other industry stakeholders. We want them to think of UK as the centre for Pakistani fashion in terms of creativity and marketability.
Again this does not mean that we want them to relocate their businesses to Britain; rather they can expand there and leverage the market accessibility, technology and brand development opportunities available in the UK. But, already there are companies that have so far predominantly manufactured products for third parties and now want to establish their own retail presence internationally.
On the other hand, it is also very heartening to note that as retail businesses have mushroomed in Pakistan, UK-based companies have been on the forefront. If you walk in to the new Dolmen Mall in Karachi you will find that brands such as Next, Toni & Guy, Monsoon and Accessorize make up about 60 percent of the shops there. The opening of Debenhams this summer will also go a long way in shaping perceptions about investments in this country.
BRR: Shifting gears, tell us more about developmental assistance from the UK to Pakistan.
FC: The bulk of our development assistance to Pakistan is being directed at universal primary education. We have allocated over 650 million pound sterling which will be spent over the next four years to get millions of children into schools. For this purpose we are working in close co-ordination with the Federal and Provincial Governments as well as the private sector. Our focus is on making these initiatives self sustaining, instead of remaining dependent in the future.
BRR: Why would prospective investors prefer the UK over the Middle East or other countries?
FC: The UK ranks highest on the World Bank's ease of doing business list. Setting up a business in the UK takes about 15 days, which is the lowest among the G20. The corporate tax rate is also the lowest among the G20. Besides this, Pakistanis also have an overall understanding and familiarity with the culture in the UK. You know the legal, financial and judicial frameworks.
Then there are thousands of Pakistanis who regularly head over to the UK for vacations; they have houses and other property there, their children are studying at schools and universities there. It's a place where Pakistanis like to go and know well. Then there is political and financial stability in the UK. So there is a constellation of common links between the people of Pakistan and the UK, which coupled with the dynamism of the latter's economy sets an excellent value proposition for potential investors from Pakistan.
Pakistanis get British humour! This kind of familiarity cannot be developed in just one lifetime; the shared grammar has emerged as a result of generations of interaction, familiarity and contact. Our largest diplomatic presence in any country of the world is also in Pakistan. But, what strikes me most about Pakistan is the hospitality and friendliness.