The first trade mission from Belgium to Pakistan in five years arrived in the country last week to meet with prospective clients and business partners in Karachi and Lahore. BR Research met with; His Excellency, the Belgian Ambassador to Pakistan, Frederic Verheyden, the Belgian Trade Commissioner, Abid Hussain as well as a number of trade delegates visiting from that country. The transcript below is based on excerpts from the conversations with members of the Belgian trade mission.
The Economic and Commercial Representation at the Embassy of Belgium in Pakistan facilitated the arrival of a 15-member trade delegation comprising of representatives of 12 leading Belgian companies from the Flanders Region and from the Walloon Region of Belgium. The delegation comprised of companies dealing in varied sectors such as; steel, wood, food and food ingredients, building materials, telecommunications and information technology, medical analogue and digital imaging systems, logistics, industrial equipment and machinery, engineering consultancy for ports and water management, etc.
Strong business-to-business ties were the focus of the mission as its members held close to 200 meetings with representatives of Pakistani businesses as well as the Chambers of Commerce and Industry in both Karachi and Lahore. As highlighted, this was the first trade mission to Pakistan from Belgium in about five years.
BR Research inquired whether the visit indicates improving perceptions about the security situation and business climate in Pakistan, among Belgian businesses. While the respondents pointed out that the mission was envisioned about three years back; they conceded that recent improvements in the overall situation and perception, bolstered the decision to carry on with the intended visit.
Pharmaceuticals, chemicals, steel and machinery are the major imports from Belgium to Pakistan whereas textiles are the country's major export to the European nation. According to the Belgian Ambassador; the granting of GSP Plus status has provided a boost to Pakistan's exports to Belgium and the rest of the European Union. He highlighted that the bilateral trade balance between the two countries is slightly skewed in Pakistan's favour.
Providing an overview of the Belgian economy and its reliance on international trade, Trade Commissioner Abid Hussain stated; "Belgium is one of the most dynamic and open economies both in Europe and world-wide. Foreign trade is the lifeblood of the Belgian economy. Exports and imports account for more than 70 percent of the country's GDP. It is the eighth largest exporter of goods world-wide and the thirteenth largest exporter of services in the world. GDP per capita is higher in Belgium than the European average."
Commenting on the prevalent economic woes of the EU, Mr. Verheyden stated; "Belgium has weathered the crisis rather well and its companies are known for their high level of efficiency. Given this characteristic, Belgian companies have been able to thrive even during times of economic crises."
However, Belgium's exports to Pakistan are not just subject to the state of that country's economy. The trade commissioner pointed out that "there is a strong linkage between industrial output of Pakistan and Belgium's exports to the country." He explained that the majority of Belgian exports to Pakistan comprise of raw material for various industries. Resultantly, the energy crisis which has afflicted industries in Pakistan, has also capped imports from Belgium due to the restricted industrial activity.
Mr. Abid Hussain highlighted that; "an overview of Belgian-Pakistan bilateral trade shows a steady increase every year with the balance of trade more or less equally distributed. The bilateral trade figures for 2014 show a positive growth with Belgian exports touching 321 million Euros and Pakistani exports also recording 356 million Euros. This makes Belgium the fifth largest trade partner of Pakistan from within the 28 EU countries."
In terms of opportunities to increase bilateral trade, he stated that; "Pakistan presents a multitude of opportunities and challenges to Belgian companies to export goods and services to meet the emerging needs in terms of infrastructure, environment, energy, transport and telecommunications. These are the niche markets in which Belgian companies have already proved their know-how and expertise."
The Belgian officials highlighted a distinction in the bilateral trade between the two countries. "Pakistan remains the destination country of all Belgian exports to this country. However, anything that goes from Pakistan to Belgium is not necessarily for the Belgian market." He explained that given Belgium's strategic location and its ports; many Pakistani products are exported to that country, for onward export to other destinations. In this way, Belgium acts as a conduit for Pakistani exports to Europe.
Although there has been no significant flow of foreign direct investment from Belgium to Pakistan; the trade commissioner pointed out that a Belgian family has acquired a stake in Sapphire Textiles and operates a factory in Pakistan. He informed that "ninety percent of the workforce of that factory is comprised of women", so the Belgian investors have facilitated women employment in the country.
"Pakistan's industrial profile is changing. It is evolving towards modernisation and the adoption of newer technologies" stated Mr. Hussain. He highlighted that Belgian exports can play a catalytic role for Pakistani's conventional industries as well as sunrise sectors such as horticulture, value-added agricultural products and food. He also pointed out that a Belgian company is working with Pakistan's meat sector to help implement quality control standards that are necessary for export of meat products to various destinations across the globe.