The much-trumpeted high level official visit of prime minister Shehbaz Sharif to China is at its tail end. It is a high-level visit with high expectations as a significantly high number of federal ministers, dignitaries and advisors supported by an equal number of government functionaries and around 100 business leaders from Pakistan are reported to have accompanied the prime minister.
To narrate, in generic terms, such high level visits from Pakistan to China in the past, notably, after the roll out of CPEC (China Pakistan Economic Corridor), were bullish at both ends with Pakistan taking home few mega projects to be paid for in installments over the years. Pakistan is now struggling against the payback challenge and the mood at the current visit is bearish with no project for Pakistan to carry back home.
Pakistan’s addiction to loans with a mindset that ‘somebody else at some other time would pay for it’ has resulted in Pakistan becoming a perpetual loan seeker from the IMF. The country has derailed the CPEC that was once considered as a game changer for the economic and fiscal sustainability of the country. The name of the game is to turn loans into revenue generation and profitability, but this is something which gets lost in the muddled governance of the country.
The current visit of the prime minister is devoted to the path of soft targets; notably, business-to-business meetings, showcase of China’s spectacular rise as a world leader in technological excellence and trust-building between the government of Pakistan and China, which suffered setbacks on security concerns for Chinese citizens in Pakistan and an enabling business environment in Pakistan under the background of a setback to China-sponsored projects in Pakistan. The soft targets, under the prevailing economic and fiscal challenges, may work better for Pakistan.
The high point of the current visit of the prime minister is business-to-business (B2B) meetings between the business leaders of China and Pakistan. Reportedly, as many as 500 companies from China and 100 from Pakistan took part in Pakistan-China business meetings in which 32 MoUs are reported to have been signed. Also, some bilateral negotiations were held with Chinese companies.
Prime minister Shehbaz Sharif drew a comparison between the $500 billion GDP of Shenzhen, a city of 13 million people, and the $380 billion GDP of Pakistan with a population of 250 million and described the Chinese city’s swift transformation a “miracle of this century” and the “eighth wonder of the world”, necessitating for others to learn the lesson from.
“I will go back to Pakistan with this resolve; come what may, we will follow this model of great economic transformation in Pakistan. This model is enough to copy and simulate if we are sincere to our purpose and people. By God, I can tell you this is difficult but not impossible,” he told a gathering of hundreds of business leaders from Pakistan and China.
As the Business Forum also marked the B2B matchmaking, he urged the Pakistani businessmen to sit with their Chinese counterparts and find out ways to move Chinese textile industries to Pakistan and make joint collaborations in steel and other industries.
“Today is the opportunity, time and moment to capture. Sit down with Chinese friends to have serious discussions. I want to ensure you not as prime minister but as Chief Executive of Pakistan that I will give you the fullest support so that businessmen of Pakistan and China get benefits jointly,” the prime minister remarked.
The Pakistan delegation was showcased the spectacular technological advancement China made in all spheres of life - having started its journey to progress in 1948 (one year after creation of Pakistan in 1947). This did not go unnoticed by the prime minister who acknowledged that Pakistan has lost its way. He recalled that during the decades of 50s or 60s, Pakistan’s economic indicators were better than those of China and called for a collective resolve to regain its stature.
China’s offer for collaboration in scientific research and development and support to startups needs to be worked upon with the indulgence of the private sector.
On the complex issue of protecting the lives of Chinese citizens in Pakistan, the prime minister said: “I will spare no effort to protect the lives of our Chinese brothers and sisters in Pakistan. I want to assure and guarantee you, that we will provide them security, more than our own self. This is my pledge and commitment that this will never happen again.”
He assured the Chinese side that his government had already initiated structural changes in Pakistan to control corruption. He, however, did not specify reforms.
While there are no mega projects to take home but there are a number of soft targets and opportunities to take home and diligently work upon. Foremost is the B2B collaboration, collaboration in scientific research and development in industry, development of startups and migration of Chinese textile industries to Pakistan. All this needs to be done on B2B with the government facilitating the process at an arm’s length.
Having underlined the opportunities, there are formidable challenges to make things happen in Pakistan. Cost and ease of doing business in Pakistan continue to pose a serious challenge to the sustainability of businesses, notably, the industrial sector.
While the prime minister was vowing security to the Chinese, in Pakistan, around the same time, the business community of Karachi was holding a press conference, raising concerns over lawlessness in Karachi and urging the prime minister, the chief of army staff, the chief minister of Sindh and the interior minister to take notice of the rising lawlessness in Karachi, which, if not promptly addressed, would lead to the flight of investment from the largest city of the country and intensify problems for the already ailing economy. Such news in the media does not go unnoticed by the local and foreign investors nor by China and Saudi Arabia - the two potential foreign investors in Pakistan.
In B2B meetings in China around 32 MoU are reported to have been signed. The track record of MoUs materializing into reality on ground, in case of Pakistan, is unfortunately not encouraging at all. It was only last month that a 50-member delegation of businessmen representing 30 business groups in the Kingdom of Saudi Arabia visited Pakistan and held 447 B2B meetings with more than 140 Pakistani companies.
In the report submitted to the premier, a follow-up mechanism has been proposed for facilitating business interaction among the companies of both the countries. Prime Minister Shehbaz Sharif has been informed that only two memoranda of understanding (MoUs) have been signed on business-to-business (B2B) — fried onion products and human resource development (HRD).
However, with China it might work out better in view of each side understanding the markets better and the prevailing workable supplier and importer relationship and seamless supply chain mechanism.
One thing which remains intact against all odds is the high regard in which China holds its relationship with Pakistan and vice versa. The current visit is scheduled to round off in Beijing amidst full protocol and meetings between the Prime Minister Shehbaz and President of China Xi Jinping.
Copyright Business Recorder, 2024
The writer is a former President, Overseas Investors Chamber of Commerce and Industry
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