Factors hindering trade between Pakistan, OIC countries highlighted

KARACHI: Muslim countries have enormous resources and potential, but the task is to translate this potential into an asset. Promotion of economic links among the Muslim countries could help generate greater flow of capital from within and beyond the Islamic world, said Sheikh Sultan Rehman, vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), at a webinar.

He said that absence of unity and cooperation among the OIC countries was the biggest challenge in the present uncertain political and economic situation in the Islamic countries. He added that the OIC was the second largest bloc in the world, representing one-fourth of the total land.

He said that the collective GDP of the OIC was US$6.5 trillion with an average per capita income of US$7,189. He further added that trade among the OIC countries was 17.5 percent of the total trade of the OIC countries while the intra-regional FDI stood at 2 to 3% of the GDP.

He also quoted some of the figures of the Islamic world's economy, saying that Muslim countries spent US$2.2 billion on food, lifestyle and tourism, and the figure was growing 5 to 6 percent annually which indicated the potential of Halal food industry.

While commenting on Pakistan's relations with the Muslim world, he said that Pakistan had strong and significant relations with all the Muslim nations at the political level, but these relations did not reflect in terms of trade volume despite the fact that there was a huge potential for trade due to geographical proximity, religion and cultural ties.

The reason behind the low level of trade was lack of information sharing and low-level of interaction among the private sector of Pakistan and that of the OIC countries.

He said that among the OIC member states, Pakistan had signed FTA only with Malaysia and PTAs with Indonesia, Mauritius and Iran. Muhammad Salman Ali, trade and investment attache of Pakistan in Qatar, said that value added food products, pharmaceutical, construction material and agro-products had huge potentials for export to Qatar.

The FPCCI and the TDAP should regularly participate in the exhibitions organized by Qatar for enhancement of trade. Khadim Ali, trade and investment attache of Pakistan in Jordan, said that Jordan was a consumer market which was importing rice, meat, fruits, sugar, tea, coffee, textile, plastic items, ceramics, etc., wherein there was potential for Pakistan to export.

Currently, India and Europe are penetrating in Jordan and share of Pakistan in Jordan's trade is less than one percent. He indicated that there are no marketing efforts and only one delegation of Pakistan visited Jordan last year. Moreover, Pakistani businessmen should regularly participate in exhibitions and trade fairs in Jordan.

Bilal Pasha, consul-general of Pakistan in Turkey, said that there was no operational trade agreement among the 57 countries of the OIC which was the main reason of low regional trade.

Market access, connectivity, transportation, financial connectivity and B2B connectivity are challenges which Pakistan faced in trade with Islamic countries. Turkey is advance in science and technology, and there is scope for collaboration for both countries in light engineering, chemical, agriculture, leather and textile.

Fauzia Perveen, trade and investment attache of Pakistan in Indonesia, said that there were huge non-tariff barriers in terms of import license, quality requirements, etc. Pakistan and Indonesia made Preferential Trade Agreement operational in 2013 which was mainly benefiting Indonesia.

Copyright Business Recorder, 2020