Rawalpindi Chamber of Commerce and Industry exploring Thailand Market

Thailand is an important member of the Association of Southeast Asian Nation (ASEAN) nations. Pakistan starts its diplomatic relation with Thailand in 1951. Since then both of the countries have been enjoying good relations.

Thailand is a Buddhist country with a population of 64.07 Million. Thailand has a GDP 272 US$ bn and with a GDP of 4099 US$ per capita. The total export of Thailand is a 153 US$ bin and a total import of the 141 US$ bin.

Major industries of Thailand are as follows:

• Tourism
• Textile
• Garments
• Agriculture
• Cement
• Furniture
• Jewelry
• Tin
• Automobile Parts

The total import of Pakistan from Thailand is 593.27 US$ Million, however total export to Thailand is only 69.58US$ Million. The balance of trade is in a favour of Thailand. The major trading partner of Thailand is the United States with 15% share of total exports and Pakistan share is only 0.39%. The major item of export from Pakistan to Thailand are fish, chemical, organic chemical, cotton yard and leather manufacturing. On the other hand major item import from Thailand to Pakistan are road vehicle, yarn, plastic, organic chemical and boiler machinery.

Rawalpindi Chamber of Commerce and Industry (RCCI)  organized a trade delegation led by myself to visit Thailand. The mission of the delegations was to; explore a new venue of business, enhance bilateral trade relations and discuss a way to build strong links with Thailand.

Pakistan embassy in Bangkok facilitated the delegation visit and arranged its meeting with Thai Counterparts. The delegation visited an exhibition titled “Thailand Mega Show”which focused on a broad range of goods such as furnitures, home decor, jewelry and accessories, health and beauty spa, food and etc.

The delegation also held a meeting with the ambassador of Pakistan to Thailand Sohail Mehmood; who gives a comprehensive overview of Pak-Thai trade, economic relation and the potential of each other’s market for fruitful mutual collaboration including joint ventures. The ambassador ensures the delegation to provide full support for further such visits and business development efforts.

Commercial counselor of Pakistan to Thailand Zafar Ali Shah briefed the delegation on the general business environment in Thailand. Later on the delegation had interaction with the Thai-Pak Chamber of Commerce (TPCC). The delegation also visited the Germ factory in Pattaya. The administrators of the factory briefed the delegation regarding gems and jewelry promotion efforts to strengthen the industry.

After the completion of my successful visit to Thailand I presented a report to the President Rawalpindi Chamber of Commerce and Industries Mr. Kashif Shabbir. The presented appreciated the efforts made by delegations and congratulated on a successful business tour.

Pak India Trade

Pakistan India Trade Benifits

Despite the political issues that divide Pakistan and India, steps could be taken toward better economic relations through expanding trade between the two countries.

It is believed that increased trade relationship can play a vital role in normalizing the political relationship between the two countriesBoth countries are members of the South Asia Free Trade Area (SAFTA) established in January 2006. India has given Most Favorite Nation status to Pakistan in 1995. In1947. In 1948-49, 70 per cent of Pakistan’s trading transactions were with India, while 63 percent of Indian exports went to Pakistan.

The trade volume between the two nation is $ 2.70 billion however trade through third country and illegal channels is quite significant and is estimated to be more than $ 2 billion.The results show that on the basis of existing pattern of Pakistan’s trade with the rest of the world and price structures, the total trade potential (exports plus imports), between Pakistan and India could be around $ 5.2 billion.

The potential exports to India is estimated around $ 2.5 billion. The export items include fresh and dry fruits, sugar, raw cotton, gems, fish, marbles onyx, and textiles.

Granting MFN status to India Pakistan can not only increase its exports by capturing a big market but also stands to save substantially by substituting some of its imports from the rest of the world with India.The Indian trade regime is still more restrictive than its counterpart in Pakistan. According to an IMF study, India’s trade restrictiveness measures 8 (on a scale from 1 to 10), while Pakistan’s index stands at 6 [IMF (2004)].The two broad reasons, generally quoted, for low volume of trade between the two countries are (i) the presence of non-tariff barriers in India; and (ii) the absence of MFN status to India. While the first reason is quoted exclusively by the Pakistani exporters the second reason is shared by traders on both sides of the border.As regards the trade barriers, both India and Pakistan have had a very restrictive.Both countries need to build public support for trade liberalization between them. Initial steps should focus on the following bilateral measures.

1. Easing restrictions on visas.
2. Removing the requirement that rail wagons carrying goods across the border return empty.
3. Opening additional road border crossings and bus routes.
4. Increasing air links between the two countries (particularly establishing flights between Islamabad and New Delhi);
5. Increasing the number of customs posts; and allowing branches of Indian and Pakistani banks to operate in the other country.
6. Pakistan granting MFN status to India and in turn India significantly lowers tariff rates for goods of particular interest to Pakistan (such as textiles and agricultural products).
7. Facilitating energy trade between the two countries through building gas pipelines and eventually joint energy grids.
8. Allowing trade in information technology.
9. Harmonizing customs procedures and eliminating obstacles to foreign direct investments by the other country.

The potential for trade between the two countries is huge, There is no doubt that increasing trade would significantly raise GDP and household incomes in both countries, and would particularly benefit Pakistan.Trade will of course not solve all the problems between the two countries, but it could be an important catalyst in the lowering of tensions, which certainly has to be in the interest of both India and Pakistan.

It is asserted that the opening up of Pakistani market for all Indian products would hurt the domestic manufacturing sector. The arguments reflect that our industry is noncompetitive and inefficient relative to the Indian industry. It is expected that the Pakistani markets will glut with cheap Indian products and the domestic producers will not be able to compete due to lower prices. Specifically, the domestic auto and the electronics industry may face tough competition as the Indian industry is relatively well established and efficient. For the textiles sector, it is argued that since the Indian textiles industry is more into the domestic supply as compared to an export oriented Pakistani textile sector, the low cost textiles of India would wipe out the Pakistani textile production meant for the domestic consumer.

Opening the borders does not suggest an unrestricted flow of Indian products. All the Indian imports will remain subject to the tariffs already in place. It can be argued that if the Indian goods remain cheaper than their domestic counterparts even after paying the import duties, then why not allow them? Though the ultimate conclusion could only be based on gains in general welfare, there is no doubt that the consumers will be the net gainer in this situation. 

Rawalpindi Chamber of Commerce and Industries Exploring Malaysian Market

Malaysia is among one of the important countries in far-east with over 26 Million populations. I have personally collected some interested statistics, which describe Malaysia’s importance.

Malaysia has a total of 190$ billion GDP. Whereas the GDP per capita is 6980US$ and the GDP growth is 6.3% yearly.

The amounts of GDP shares in different sectors are as below:

• Agriculture 7.2%
• Industries 33.3%
• Services 59.5%

The different type of industries working in Malaysia includes rubber, palm oil processing and manufacturing, tin mining, electronics, processing timber, petroleum product and oil refineries.

Many of the countries are acting as trading partners of Malaysia’s export. Among them, some of them are listed below:

• United States with 8.7% of shares
• Singapore with 15% of shares
• Japan with 10% of shares
• China with 6.7% of shares
• Pakistan with 0.5% of shares

On the other hand major trading partners of Malaysia’s import are:

• Japan with 59.5% of shares
• United states with 14.5 of shares
• Singapore with 11.1% of shares
• China with 9.8 of shares
• Pakistan with 0.05 of shares

Now, let’s have a look at some indicators, particularly related to Pakistan. Pakistan has a total of 94.38 Million US$ export to Malaysia and 1261.41 Million US$ imports from Malaysia. Pakistan has 3.1% share in total imports to Malaysia and just 0.49% share in total export. The major items of export from Pakistan to Malaysia are cotton yarn and fabrics, rice, fish, textile articles and main made filaments. Whereas the main items imported from Malaysia to Pakistan are animal, vegetable fats and oil, Organic chemical, Boilers, machinery, mechanical application, plastic and telecommunication equipment.

The researched statistics show that there is some work required to increase trade between Pakistan and Malaysia. Also the economic indicators show that the trade between both countries is not satisfactory.

So, the business community in Pakistan must play an effective role to capture Malaysia’s import and export market. For this reason, on 18th January 2010, a ten member delegation of Rawalpindi Chamber Of Commerce and Industry (RCCI) lead by me; visited Malaysia to discuss the way to build strong links with both countries.

Munir Ahmed, leader of the delegation Rawalpindi Chamber of commerce & Industry (RCCI) presented a shield to Ambassador of Pakistan to Malaysia General (R) Tahir Mahmood Qazi at Kulalumper

During the 8 day visit, the delegation also attended an exhibition for the advancement of material and process engineering (SAMPLE) Asia Expo 2010.

The delegation held a meeting with an Ambassador of Pakistan to Malaysia General (R) Mehmood Qazi. Ambassador emphasized the importance of increase trade. He said investment ties between Pakistan and South East Asia in this context will enhance Pakistan-ASEAN relationship.

Munir Ahmed, leader of delegation Rawalpindi Chamber of commerce & Industry (RCCI) With Dr. Imtaiz A Kazi Deputy Head of Mission to Malaysia at Kulalumper

Commercial Consular for Pakistan High Commission Mr. Wajjiullah Kundi verified the delegates about the general business environment in Malaysia. He offered his full support and cooperation.

Further, the delegation meets with various business entities of Malaysia representing different sectors such as jewelry, computers, stationery and pharmaceutical with an objective to establish business to business contacts and promote bilateral trade.

During the stay delegation held meetings with following business organizations:

President of Malaysian Organization of Pharmaceutical industries (MOPI)

Nationally ICT Association of Malaysia (PIKOM)

President and members of Kuala Lampur Chamber of Commerce and Industry and Chairman

Members of the Malaysian Printers Association for business networking

Later the delegation attended a dinner hosted by Malaysian Printers Association and arrived back to Pakistan on 26th January 2010.

I presented a report to president Rawalpindi Chamber of Commerce and Industries (RCCI). President RCCI Kashif Shabbir and executive body of RCCI appreciated the work of the delegation and congratulated me on a successful tour. Kashif Shabbir quoted that this report will probably help the business community of Rawalpindi and Pakistan as well.