Malaysia-pak­istan trade grow­ing

Enterprise - - Bilateral -

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

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