German Ambassador to Pakistan Dr Michael Koch clarified on Wednesday that money pledged at Friends of Democratic Pakistan(FoDP)during the Tokyo conference in April 2009 was never earmarked for budgetary support and will not materialise till projects submitted by Pakistan have been approved by the German government.
In an exclusive interview to Business Recorder, he said that there was some confusion over FoDP pledges. In actuality Germany did not pledge any assistance to Pakistan for budgetary support; instead it committed to providing assistance against specific projects that have yet to be identified.
Most of the pledges, he added, are expected to materialize by the end of 2010. Dr Koch said that his country would ensure that the money it pledged at Tokyo Conference is released to Pakistan. Asked about the perception that there has been a disappointingly small materialisation of Tokyo pledges, he said that he "totally disagrees with such a perception as pledges by FoDPs were to materialise systematically against submission of projects".
The Ambassador said that his country wanted to see an economically and democratically stable Pakistan and acknowledged social and economic losses Pakistan has suffered and continues to suffer as a frontline ally on war against terrorism. "Pakistan's role to effectively counter the challenge of extremism and terrorism has been appreciated by the world," added the ambassador.
The Ambassador said that Pakistan's demand of giving market access to its goods in Europe and US was legitimate following huge economic losses faced by it during the last many years as partner of war against terrorism. Pakistan was an important trade partner of the EU and hopefully the issue of FTA would be discussed during Prime Minister Syed Yousaf Raza Gilani's forthcoming visit to EU summit in a few weeks.
The FTA would be an ambitious way to move ahead and would have no impact on the bilateral trade agreement singed recently by Pakistan and Germany. This bilateral treaty was important because it reduces the risk and would hopefully increase the volume of trade between the two countries.
Asked whether the treaty offers any incentives, the Ambassador said it does not offer any financial incentive but guarantees protection to their investment. Moreover, the agreement provides the investors of both the countries to be treated fairly and provide equal opportunities for business as well as international arbitration for the settlement of disputes.
The Ambassador focused on one question that was uppermost in the mind of every prospective German investor: the nature of the investment protection treaty with Pakistan. With the signing of a new agreement which, in fact, is a revision of an older one with some modification to meet the modern needs of trade, the German Embassy in Islamabad is in a position to respond to investors with greater confidence that such an agreement would ensure protection to their investment.
To a question about the volume of bilateral investment between the two countries, Dr Koch said that total trade volume was $1.8 billion last year - a significant decline from $2.2 billion in 2008 which is largely because of global economic down turn. The ambassador said the current German investment to Pakistan was 220 million Euros which could increase significantly next year.
He said that his country was helping Pakistan overcome the prevailing energy crisis through economic and business co-operation between the two countries. "We are helping Pakistan by making available expertise on renewable energy while the Embassy here has taken the initiative on business co-operation and persuaded German investors to invest in wind energy, in which a number of German companies have invested."
The symbolic message of a bilateral agreement was to give the message that Germany was striving to attract more foreign investment to Pakistan by reinforcing bilateral investment ties. The response to the agreement has been very encouraging, the Ambassador noted.