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INTERVIEWPakistan eyes more investment opportunities with Korea

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Pakistan's Commerce, Textile, Industry, Production and Investment Minister Abdul Razak Dawood stresses forming a favorable environment for trade with Korea. / Korea Times photo by Yi Whan-woo
Pakistan's Commerce, Textile, Industry, Production and Investment Minister Abdul Razak Dawood stresses forming a favorable environment for trade with Korea. / Korea Times photo by Yi Whan-woo

By Yi Whan-woo


Businessman-turned-bureaucrat Abdul Razak Dawood admits Pakistan lags behind India, Bangladesh and ASEAN countries when it comes to trade with Korea.

But Pakistan's minister for commerce, textile, industry, production and investment also argues that his country is more competitive in terms of free trade zones and other investment opportunities.

His outspoken style is different from career diplomats who are extremely cautious and refrain from making comments that might make their country or neighboring countries look bad.

In fact, Dawood's is far from diplomatic rhetoric and his get-to-the point style can make his partners pay attention. And this is what he did when he met Korean government officials and businesspeople to bolster bilateral trade.

"When I look at the amount of trade and investment from Korea to Pakistan, it's too little," he said during his latest visit to Seoul. "The economic relationship is too low and I am not seeing enough investment from Korea.

"To bring more trade, let's sit down, have working group, roll up our sleeves, do analysis together, and understand each other where we can leverage the strength of Korea and Pakistan together. We want to export more; we have no problem with importing more from Korea."

Pakistan is the 55th largest exporter and 58th largest importer of Korean goods.

In 2018, Korea's exports to Pakistan totaled $604 million while its imports were $535 million.

Among the major export items were semiconductors, petrochemicals, auto parts, ships, steel, electronics, plastics and computers.

The imported goods comprised raw materials and industrial input, such as cotton textile goods, ready-made garments, copper scrap, surgical instruments, un-denatured and denatured ethyl alcohol, seafood, salt and mineral and naphtha.

He said Korea's high tariffs on Pakistan products were behind the trade situation.

For instance, the tariff rate for many Pakistan-manufactured clothes was 13 percent, but India and Bangladesh, there were no tariffs for the same products.

"How can we compete?" Dawood asked, adding that he had discussed investment and trade opportunities with Minister of Trade, Industry and Energy Sung Yoon-mo and executives of Korean business lobby groups and conglomerates.

Dawood led an 11-member delegation during the visit.

Delegates included Secretary of Commerce Sardar Ahmed Nawaz Sukhera and Pakistani business leaders.

Darwood — the founder of multinational engineering company Descon and also the Pakistan Business Council — said he would visit Korea again in October as part of efforts to increase dialogue.

To bolster trade, he suggested an Early Harvest Program (EHP) leading to a comprehensive free trade agreement (FTA).

Under the EHP, both sides may exchange a list of 30 to 40 tariff lines for immediate market access to create a level playing field.

According to the Embassy of Pakistan in Korea, both sides may start FTA talks in 2020.

"There must be an FTA with you (Korea), and if an FTA takes a long time, we can do EHP as a starter," Dawood said. "By doing so, we can have an equal opportunity to compete."

Under the "Invest Pakistan" campaign, Pakistan has highlighted its population of 200 million people, with 55 percent aged 19 or under.

This bodes well for long- term sustainable economic growth, according to the embassy.

A large part of the workforce is proficient in English, while there is a large pool of trained and experienced engineers, bankers, lawyers and other professionals, many with substantial international experience.

"We're cheaper compared to India, Vietnam, Bangladesh, and Sri Lanka — we're the cheapest and we deliberately want to keep it cheap," Dawood said.

He also said Pakistan was located "to become Asia's premier trade, energy and transport corridor."

As the gateway to Central Asian countries, the Gulf States and Far East countries, Pakistan is a marketplace teeming with possibilities.

Dawood said Pakistan's special economic zones are designed to compete globally and to attract foreign direct investment. The zones offers industrial clusters with liberal incentives, infrastructure, investor facilitation services to enhance productivity and reduce costs of doing business for economic development and reducing poverty.

Dawood highlighted textiles, leather, light engineering, food processing and pharmaceuticals among preferred investment sectors.

"I would love to see a greater Korean footprint in Pakistan," he said.

Asked about concerns that the China-Pakistan Economic Corridor (CPEC) had put Pakistan in a debt trap, he said the CPEC would not affect Pakistan's relations with other countries.

CPEC is a megaproject connecting Pakistan's Gwadar Port to China's northwestern region of Xinjiang with highways, railways and pipelines.

"Whatever we do with China does not affect our relationship with Korea, Japan, the United States and Europe," he said. "We're telling the world we're not only cooperating with China, we're cooperating with everyone."

Pakistan-Korea relations have gone through various phases during the last five decades.

From 1948 to 1960, as a committed member of the Western alliance, Pakistan supported South Korea until the peninsula's division into North and South Korea.

In 1968, both North and South were allowed to establish consular missions in Pakistan.

In 1980, a Consulate General was opened in Seoul, and in November 1983 diplomatic relations were raised to ambassadorial level.

The first visit of a Korean Prime Minister to Pakistan was undertaken by Chung Hong-won in 2014. This was the highest level visit from Korea to date.

At the invitation of then-President Lee Myung-bak, Pakistani President Asif Ali Zardari visited Seoul in December 2012.




Yi Whan-woo yistory@koreatimes.co.kr


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