The trade between Sri Lanka and Pakistan is growing, and would reach one billion-dollar mark in the next five years, High Commissioner for Pakistan in Sri Lanka Shahzad A Chaudhry said. Speaking at a programme organised by 'National Chamber of Exporters' last week in Colombo, he said there was a sharp increase in trade after signing the FTA between the two countries in 2005.
According to a press release received here on Friday. Trade, which was around 35 million dollars before signing the MoU, passed the 200 million-dollar mark after the MoU. "Though this is a sharp increase it is not at all sufficient. Both countries have lot of potential that has been under-utilised," he said. In the first six months of this year, trade passed the 285 million-dollar mark with the trade balance being in favour of Pakistan.
Exports to Sri Lanka in the first six months rose to 285 million dollars. The High Commissioner said that most of the countries in the region were trying to do business with Europe and had ignored the potential in regional trade.
Shahzad said the hospitality industry was an area that had been untapped. "Some of the hotels in Sri Lanka are top of the line and are sometimes better than what they have to offer. The hospitality in Sri Lanka, too, is better than what is available in Pakistan," he said.
"Buddhist tourism, too, has tremendous potential that is yet to be exploited," he added. Another area where there are opportunities for Sri Lankan entrepreneurs is the retail trade in Pakistan. "Pakistan has a growing upper class with relatively high per capita incomes. We do not have supermarket chains such as Cargills, Keells, Arpico and Laugfs, and Sri Lanka could look for opportunities in this area," he said.
While Pakistan produces the best textiles and yarn, these cannot match the high quality of Sri Lankan apparels. "Therefore, both countries should share knowledge in these areas and joint ventures would be very gainful for both countries," he said. "Pakistan is now the most investment-friendly nation in South Asia. Business regulations have been profoundly overhauled along liberal lines, especially since 1999.
"Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100 percent of equity participation is allowed in most sectors (local partners must be brought in within five years and contribute up to 40 percent of the equity in the services and agriculture sectors). Unlimited remittance of profits, dividends, service fees or capital is now the rule."
The World Bank report published in late 2006 ranked Pakistan (as 74th) well ahead of neighbours like China (93rd) and India (134th) on ease of doing business. Pakistan's economy is growing at seven percent and last year it had six billion dollars foreign direct investment. The automobile industry, too, is growing and last year 160,000 units were manufactured.
"We can assist Sri Lanka in engineering, fruit and vegetables and dairy sectors and the embassy staff in Colombo would assist any local exporter", he said. Pakistan's KSE-100 Index was the best performing stock market index in the world as declared by the international magazine 'Business Week'. Pakistan exports rice, cotton, fish, fruits, and vegetables and imports vegetable oil, wheat, cotton, pulses and consumer foods. The country is Asia's largest camel market, second largest apricot and ghee market and third largest cotton, onion and milk market.