Pakistan-Japan Economics

JETRO is the trade and Investment arm for the Government of Japan in Pakistan. JETRO, Japan External Trade Organisation, is a government-related organisation that works to promote mutual trade and investment between Japan and the rest of the world. JETRO works under the Ministry of Economy, Trade & Industry of the Government of Japan.
Originally established to promote Japanese exports abroad, JETRO's core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small to medium size Japanese firms maximise their global export potential. JETRO Karachi Office was established in 1954 as the third overseas office in the world; it is actively working for the promotion of trade and investment since its inception. Currently JETRO focuses on 4 main objectives: Working to boost Japan's Trade / Exports, Supporting Japanese Companies abroad. Working to carry out economic research Promoting investment in Japan
In order to achieve its objectives, JETRO Karachi Office carries our various activities including:
-- Participation and Organising Trade fairs in Japan and Pakistan (FOODEX, Japan Pavilion@ EXPO Pakistan 2011)
-- Personnel Exchange by facilitating Business Missions and helping in trade tie up promotion
-- Information dissemination, entertaining Inquiries and Business Consultation
-- Arranging Seminars and Dialogues
In all, JETRO is as always more determined to renew its commitment to accomplish its inherent mission to promote trade and investment including the revitalisation of the industry, both in Japan and Pakistan.
Trade & Investment between Pakistan and Japan Trade Statistics between Pakistan and Japan have been in the favour of Japan and this trend has been increasing over the years. Several efforts are continuously being made to reduce this huge trade imbalance. Discussions on Pakistan Japan FTA and various other tools have remained the key agenda points.
In 2010-11 imports from Japan were US $1,583.3 million and Exports US $160 million. After bottoming out in 2008-09 the imports and exports both have been showing an increasing trend. In the last 3 years, imports decreased in 2008-09 by 27.5% and then increased by 6.55% in 2009-10 and 39.04% in 2010-11. Exports decreased by 9.95 % in 2008-09 and then increased by 0.24% in 2009-10 and by 25.98% in 2010-11.
Major export items from Pakistan to Japan are Cotton Yarn, Petroleum Top Naphtha, Hand knotted carpets, Surgical, Medical Appliances and Equipments, Woven cotton fabric, Leather, Guar gum, Carpets and others. In order to increase export apart from the traditional items new markets need to be explored and captured. Major import items from Japan to Pakistan are Vessels, Cars and Vehicles, parts and components, Garment Machines, Structures of iron and steel, Motorcycles and special purpose vehicles and others.
Private Companies Investment There are total 69 Japanese affiliated companies operating in Pakistan, mainly in the automotive sector and Trading Houses. The existing automotive companies have invested in production capacity as well as introducing.
From 05 to 11, major FDI from Japan has been in the following trend; Transport Equipment (automobiles) (67.26%), Power(8.63%), Financial Business (6.18%), Trade (3.77%), Metal Products (3.47%), Social Services (1.70%) and Others (5.83%)
Some recent investment by Japanese private companies include
-- YKK (Factory Expansion 2011)
-- Suzuki New Motorcycle Plant (2011)
-- Orix Properties (2012)
-- Metal One Aisha Steel (Steel Plant almost complete)
-- Performance of Japanese affiliated companies in Pak
A survey of Japanese affiliated Companies in Asia carried out by Japan External Trade Organisation (JETRO) in August in 2011 showed that 58% of companies expected better profits than the previous year however, business expansion plans of companies in Pakistan were lesser than other South West Asian countries.
Keeping view the current crisis situation of electricity and other utilities and the law and security environment it is very difficult for new comers to opt for Pakistan for investment. Limited or negligible business profits of existing companies are discouraging investors. However, it should also realise that in spite of all the circumstances, no Japanese company intends to wind up its business; instead they are being very patient and consistent about their business plans. On the other hand we see that FDI from China, UK and USA to Pakistan shows a decreasing trend.
Therefore the government needs to patiently work on long term gains and develop the policies and act on them. Short term tricky incentives will not be sustainable in the future. Improve the existing infrastructure particularly uninterrupted supply of electricity, Develop domestic commerce as well as small and medium enterprises as supporting / sub-contract industry to the 1st tier companies to form the vital pyramid type industry structure for sustainable growth. It is indispensable that the government takes care of the existing investors and make sure that they keep their business in Pakistan.