SEOUL, KOREA - Korea and Pakistan’s bilateral trade relations in the year 2011 reached an all time high of US$ 1.556 billion, which was an increase of 32% as compared to 2010. The exports to Korea being US$ 736 million and Korea’s exports to Pakistan being US$ 819 million. Again in 2012, this volume of trade further increased to US$ 1.623 billion with Pakistan’s exports being US$ 776 million and Korean exports being US$ 847 million.
Major Pakistani Items exported to Korea in 2012 were petroleum products like Naphtha, Indentured Ethyl Alcohol, Cotton Yarn, Unrefined Copper, Leather, Fish etc. While Pakistan is importing Human & Animal Vaccine for medicines, chemicals, Naphtha, Flat-rolled products of iron or non-alloy steel, Polycarboxylic Acids, Steam or other Vapour Generating Boilers, Synthetic Rubber derived from Oils etc. Korea IT Times recently had an interview with Shaukat Ali Mukadam, the ambassador of Pakistan, to find out the fruitful bilateral relations between Korea and Pakistan.
What are Pakistan’s key and promising industries?
Agriculture is the main stay of Pakistan’s economy which accounts for 21% of GDP. Around 45% of employment and 60% of exports. However, the manufacturing sector is also very vibrant. Textile and clothing industry has been the main driver of Pakistan’s exports over the past 50 years in terms of foreign exchange and job creation. 75% to 80% of total cotton and synthetic production is exported in the form of yarn fabric readymade garments, bed wear and made ups. Pakistan is the 4th largest producer of cotton and 3rd largest user of cotton. The manufacturing sector has three main components; large scale manufacturing, small scale manufacturing and slaughtering. In manufacturing, the automotive sector process a large number of cars and vehicles, which are assembled in Pakistan such as Suzuki, Toyota & Honda etc. The other major sectors are industrial machinery, cement, engineering, construction, fertilizer, sugar, steel, food processing & dairy products etc. There are also 500 licensed pharmaceutical manufacturers in Pakistan and around 30 multinational companies, who are producing products of international standards.
In what industrial sectors does Pakistan want Korean firms to invest in?
At present, there is a shortfall of electric power to the tune of 6,000 MW in peak summer and, therefore, Pakistan is looking for investment in the power sector. In the long-term perspective hydel water power is crucial. In addition to the power sector, Pakistan offers excellent investment opportunities in roads, infrastructure, chemical plants, constructions, food processing & electronics industry. The Board of Investment (BOI) is the main body providing incentives for inward investment. The Special Economic Zones (SEZs) law has been passed in 2012, which provides special incentives to foreign investors. In the past five years US 3 billion worth of Direct and Indirect Investment has gone to Pakistan.
Most of the prominent Korean conglomerates, such as Lotte Group, Samsung C&T, Hyundai Engineering, Daewoo E&C, POSCO, CK Solar, K-Water, KORAIL, Sambu Constructions, Doosan, Doekjae, Ssangyong, Korea Electric Power Corporation (KEPCO), Wisdom, STX, Deokjae Construction, Sambo Engineering, Koera Construction Institute of Plant (KCIP) etc. are engaged or are interested to participate in tenders of mega infrastructure projects, such as roads, chemical plants, tunnels, hydel power projects, thermal power projects, refineries etc.
You once said that you will facilitate cultural exchange between the two countries in an interview. Tell us about it. What activities will be undertaken?
Cultural exchanges are extremely important to foster people-to-people contact and in this context we signed a Cultural Agreement in 2012, during the visit of the President of Pakistan to Korea. As you know, this year, we are celebrating 30 years of Ambassadorial level relations and 45 years of diplomatic relations and as such numerous cultural activities are planned to be held in Korea. Just to name a few, we held a Pakistan Cultural Event in Gangneung City (3 1/2 hours drive from Seoul) on 7-8 June, 2013, which was attended by the Mayor of Gangneung and large number of Koreans and Pakistanis. A Gandhara Photographic Exhibition was held in cooperation with Gandhara Art and Culture Association and Korea Culture Association at the Korea Foundation Building on 26 June, 2013. We also organized a mango promotion event at the Westin Chosun Hotel, Seoul on 12 July 2013 and we are planning few other cultural events to take place during the course of 2013.
You also said that you hope the two countries sign a free trade agreement. What benefits can be generated from it?
We have requested the Korean Ministry of Foreign Affairs and Trade in 2009 and again in the Annual Bilateral Policy Consultation at Vice Minister level in 2011 to take the first step of Joint Study Group (JSG) as a prelude to the Free Trade Agreement. An FTA aims at wider trade liberalization and covers trade in goods & services, protection for investors and intellectual property rights. FTA between Korea and Pakistan will reduce trade barriers, create a more stable and transparent trading + investment environment. It would make easier and cheaper for Korean and Pakistani companies to export their products and services. Pakistan is a lucrative market of 180 million people that provide access and trade corridors to the oil and gas rich Central Asian countries, such as Kazakhstan, Turkmenistan etc. An FTA, therefore, would a win-win situation for both.
The Korean government is constructing the Sae-ma-eul Movement Center in Pakistan to inspire Pakistan-Korea’s past success in agriculture-based economic development.
The success of Korea as a global player in the world economy in a short span of four decades is not only attributable to the hard work of the Korean people, the dynamic leadership but also some of the most significant economic planning, such as Sae-ma-uel Undong, the village movement, are some of the achievements, which developing countries can emulate.