Malaysia-pakistan trade growing
The diplomatic links between Pakistan and Malaysia go back to 1957. Both countries have many things in common - religion, traditions and culture. Both cooperate with each other at international forums like OIC, Commonwealth, NAM, ARF, ASEM, ACD and D- 8. In recent years, progress has been made on the trade front as well. A Pakistan- Malaysia Joint Business Council has been launched and a number of Mous and agreements have been signed for cooperation in various sectors such as agriculture, transportation, communication and the Halal market. New agreements are also being made, especially in the livestock sector and many new opportunities are being explored for the long term.
In 2010, the two countries traded goods worth US$ 2.5 billion, registering an increase of 34 percent from US $1.860 billion in the previous fiscal year. Joint ventures in various fields including oil and gas, housing, infrastructural development and palm oil are already on stream while more than 15 Malaysian companies are engaged in various construction projects.
Both countries signed a Free Trade agreement in 2007, under which Malaysia reduced duties and tariffs on nearly 10,000 items while Pakistan also did the same for 6,000 items. Bilateral trade has increased under this agreement but the balance of trade is tilted heavily in favour of Malaysia. Pakistan’s exports were about $150 million but imports from Malaysia amounted to over $2 billion. In an effort to reduce this imbalance and to enhance investment in Pakistan at the same time, both governments have agreed to increase the number of exports from Pakistan to Malaysia. Pakistan aims to focus on non-traditional items such as gems and jewellery, marbles, wooden furniture, sports goods and readymade garments. For Malaysia, there is export potential in construction projects such as airports, seaports, highways, power/energy, water and housing sectors. Another opportunity is cooperation in the Islamic finance and banking sector.
The Pakistan Malaysia Joint Business Council was launched on May 30, 2011. Its main objective is to develop a stronger trade relationship between business communities, especially in agriculture and Islamic banking besides many others. The role of the Council is to help Malaysian investors in locating new business prospects. The Council recently invited a Malaysian delegation comprising 60 members to Karachi. It included businessmen from various industries and especially from the seafood/ fisheries and fresh produce sectors.
The Council aims to similarly encourage Pakistani exporters to view Malaysia as a base where they can establish ties with other ASEAN countries. Trade volumes can be increased by identifying new business opportunities and the Council will also engage both the governments to solve any issues or conflicts that may arise. An invitation from the Prime Minister of Pakistan has been sent to the Prime Minister of Malaysia, Dr. Najib Razzak for an early visit to Pakistan.
The trade prospects are still greater than what is being taken advantage of. One such example is how both countries can capture the rapidly growing Halal market. Pakistan is the fifth largest producer of milk, third largest producer of mangoes and has an animal population of over 110 million. If this is combined with the Malaysian expertise in reprocessing and packaging, efficient supply chain and well known marketing skills then both countries can easily capture the multi-trillion dollar Halal market. Taking advantage of Pakistan’s unique geographical location Malaysia can also expand their Halal exports to Middle East and central Asian countries.
All the steps taken by the Pakistan-malaysia Joint Business Council will eventually pave the way for increasing bilateral trade between the two countries