It was reported recently that the President of Pakistan is due to visit Sri Lanka in November and that a business delegation will be accompanying him. Pakistan is also one of Sri Lanka’s friendly neighbours, with very close ties to Sri Lanka.
Pakistan, like India, is a Free Trade Agreement partner of Sri Lanka. However, this again is an agreement which has not been fully utilised for the benefit of Sri Lanka with concentration on the traditional exports. The regard and respect that the Pakistani people have towards Sri Lankans have also not been fully exploited.
The International Finance Corporation in its report for ease of doing business in 2011 ranks Pakistan as best in South Asia. Although the security issues with regard to Pakistan keep stealing the limelight, the developments within Pakistan despite such issues are noteworthy.
With a mix of the traditional and modern, Pakistan is an exciting country to do business. Pakistan has over 30 million upper and middle income population, which is more than Sri Lanka’s total population.
That all Pakistani people wear traditional clothes is a myth. A walk through the shopping malls full of Western attire would indicate the niche market for sophisticated Western attire in which Sri Lanka specialises.
The market for consumer goods is on the increase and has attracted a number of Western chains to set up outlets in some of the main cities of Pakistan. However, Sri Lanka continues to limit its exports mainly to the traditional products despite the FTA opening up the market for many products in which Sri Lanka has the export capability.
Since 2009, the FTA has given duty free access to over 4,000 products. Pakistan is a market that Sri Lankan exporters should look at more seriously. Its main ports are modern and efficient. Doing business and obtaining the necessary permits are not complicated, as pointed out by the IFC report.
A Sri Lankan sales outlet displaying a full range of exportable products could be one of the promotional measures to strengthen the presence and afford opportunities to Sri Lankan businesses to get a foothold in the market.
Some products with potential are spices, porcelain ware, gems and jewellery, high fashion apparel, beauty products, sugar based confectionary, fish and meat based products, electrical apparatus, bicycles, boats, etc.
Import possibilities from Pakistan are many. A manufacturer of quality textiles including household linen and fabrics exported to many sophisticated markets, she offers a competitive option. Extremely high quality fruits and vegetables are available all year for import. A close study of the FTA will indicate a number of competitive products available for import.
Pakistan also is a good option for investments. Investment procedures are simple and uncomplicated. After the recent natural disasters faced by Pakistan, the EU has offered tariff concessions for around 75 products. Pakistan is also making a case for GSP+.
Year round availability of a variety of high quality fruits and vegetables opens an area for joint ventures in canning and other methods of fruit and vegetable processing. Joint ventures in religious tourism are another area to be tapped. Cooperation in ports and shipping could result in Sri Lanka being a catalyst for Pakistan-Bangladesh shipping routes.
A jointly-organised seminar during the Presidential visit could result in identifying products and areas for further trade and investment and also create an opportunity for the business communities to get to know each other better.
Regular interaction between the chambers and business councils would bring about a closer understanding of the business opportunities in both countries.
(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)