“Let’s do business in Pakistan”

Majyd Aziz

(Exclusive for Pakistan German Trade and Investment {GPti} Booklet)

 

In 1969, a struggling factory in Karachi, producing value-added fabrics, made a calculated decision to make its fabrics a benchmark product. It imported textile processing machinery from Famatex, Then, and others from Germany. The second step was to concentrate its dyes and chemicals procurement from German dyes and chemical manufacturers such as Hoechst, BASF, etc. In 1985, a domestic apparel manufacturing unit in Karachi introduced ready-to-wear Men’s Dress Suits and thus approached Kufner for interlining material and the required technology. The pioneering effort paid off and the brand became the leader in this field.

The above narrative reflects how these medium-sized enterprises brought about a paradigm shift in their manufacturing and their market share. I should know. My family’s business group owns these factories. This narrative also manifests the crucial need for Pakistani industries to shoot for the moon rather than being undistinguished players in the domestic and global marketplace. This narrative also offers an insight into the critical mass that companies from Europe, especially Germany, can provide to Pakistan’s industrial base.

What does all this mean for German trade and industry, more so from the medium-sized sector, to undertake bilateral trade and investment with counterparts from a nation that, despite certain negative factors, offers a remarkable potential, today and tomorrow? Rather than highlighting just the statistics in glowing detail, the emphasis should be on the track record of past ventures by German enterprises and those who took the proverbial first step towards investing in one of Asia’s growing economy.

Pakistan is the most strategically placed nation on the world map. It has always been and will be the linchpin within the region. China desires a direct route through the warm waters of Gwadar in Balochistan. India covets land access to Afghanistan and Central Asian Republics. Iran too itches for a shorter route to China. Pakistan has three working Ports that can cater to all types of sea traffic. Pakistan has mineral potential, a traditional agriculture regime, and most importantly, human capital, especially the youth bulge. All these are essential ingredients for a potent combo that is an envy of most of the countries. Then, what should be the attraction for the new German investor?

The future potential for investors is comprehensive. It is imperative that the investor focuses on the right formula so that the return on investment is beneficial and there is ample scope for enhancing the business or industry. Pakistan’s Foreign Direct Investment priorities are manifold. Energy is the burning topic. A leap in employment, in manufacturing, in revenue generation, and in improving the social sector requirements can only be made if economic activities are at a maximum swing. The successive governments have placed energy as the integral vision of their manifesto. The opportunities are plentiful but these require a massive dose of external support through financing, through direct investment and through acquiring cost-effective latest technology. The options have been laid down in a broad-based energy framework. This should be one area of priority for Germany.

A serious bottleneck impeding economic progress and affecting fast track movement of goods and essential raw material is the shortage of transportation. After decades of neglect, Pakistan Railways faced an obsolescence syndrome, a factor that retarded movement of goods, and even people. The trucking industry was, and is, mainly an owner-operator venture. Air cargo is an expensive option. Pakistan has a continuously developing road network and the conceptualized Pakistan China Trade Corridor would open up new vistas for economic development. Hence, trucking would become a very profitable and formidable investment attraction. At this moment, Pakistan has an estimated shortage of 100,000 trucks of all sizes and classifications. German transportation companies can study the future prospects since huge volumes of goods would be transported from, and to, the three Ports for China, Central Asia, Afghanistan and India whenever economic regional integration becomes a reality.

Agriculture productivity, efficiency and wastage are endemic in Pakistan. The ancestral ownership mechanism that results in bifurcation of land to descendants has impacted seriously on the output and production. Moreover, non-development of new seeds, reliance on traditional farming methods, infrastructure deficiency, feudal mindset and negative economies of scale combine into an ominous bearing on the future of agriculture. Thus, a vast field is open for German investors to enter into Corporate Farming as well as setting up livestock and poultry enterprises.

Mining is another sector that needs massive investment in nearly all its components. Although the mining areas are in difficult terrains and many are not comfortably accessible, the fact is that full development of this sector from mining to exports is brimming with opportunities. Chrome Ore, Iron Ore, Manganese, Barite, Granite, Coal and even Gems and Jewels, to name a few, are in desperate need of a paradigm shift.

Pakistan is open for business. German influence has always been positive and profitable in the past. It is time to revisit the strategy of involvement in trade and investment in Pakistan. The indicators are favorable. The Pakistani trade and industry have stretched out their hands through a visionary initiative known as German Pakistan Trade and Investment. The GPti logo is a manifestation of the desire to join forces with Germany to propel Pakistan into a higher economic echelon. So, the rallying cry for German trade and industry should definitely be “Let’s do business in Pakistan”