TEXT: It is an honor for me to address readers of Business Recorder on the auspicious occasion of 75th Edition of the Proclamation of the Republic of Italy. It is a great milestone of any nation to be celebrating the platinum jubilee. It is a day not only to reflect back on the principles that laid the foundation of a country such as the rule of law, solidarity, equality of all its citizens regardless of sex, race and religious beliefs and respect for human rights, international law as well as promotion of international cooperation. It also provides us the opportunity to ponder upon, renew our commitment towards these principles, and work towards a more prosperous future.
Over the years, the bilateral relations between Italy and Pakistan have deepened on political, economic, cultural and social fronts, which is evident not only with the increasing influx of individuals and professionals travelling between Italy and Pakistan for business, education, work and tourism but is also manifested by a growth in the trade statistics.
The trade deficit and trade surplus has always been swinging between the two countries over the last 7 years- Italy registered a deficit in 2013 (47 million), in 2014 (136 million) and in 2015 (137 mln); while it had a surplus in 2016 (22 mln), in 2017 (128 mln), in 2018 (145 mln).
Over the last 5 years, Italy swung between 13th (in 2019) and 18th position in the ranking of Pakistan's suppliers, with a market share quite steady around 1% (apart an exceptional jump to 1.9% in 2019). Pakistan instead ranked between 64th and 59th position among Italy’s suppliers (average share: 0.16%).
In 2019, the total bilateral trade value was 1.4 bln Euro (- 2% compared to 2018), out of which 685 mln of Italian export and 799 mln of Pakistani export (54 mln Euro of surplus for Pakistan).
First semester of 2020 confirms such a trend: Italy’s export -29%, Pakistan’s export -15%, with a consequent increase of Pakistan’s surplus (due to reduction in imports of furnace oil, machinery, electric equipment, edible oil and textiles; according to the report of Pakistan Bureau of Statistics issued in August 2020).
During FY 2019-2020, a trade surplus of $210 million with Italy and the bilateral trade kept on increasing despite COVID-19 and lockdowns. In value, Pakistan’s exports to Italy stood at $731 million and imports at $521 million. These data and ranking prove: - An extreme complementarily of the two economic systems, and - huge margins still to be caught from both sides Pakistan mainly exported textile, leather, rice, and ethanol to Italy. Pakistan is market leader in rice and it holds 38% share in Italian rice imports and Pakistan exported rice worth $62 million during the same period; Thailand holds 12% share with $19 million export and India at number three holds 10% with 17 million in Italian market. In 2018-19 Pakistan had trade deficit of $164 million with Italy.
Italy is Pakistan’s 9th top export destination and it hosts largest Pakistani Diasporas in the EU. Italian Foreign Direct Investment (FDI) in Pakistan during FY2020 increased 45% compared to previous fiscal year the investment jumped to 56.4m US$, mainly in Energy, Pharmaceutical, Chemicals and Information Technology sector to enhance the business to business relation between both the countries; major investment came in energy sector. Italy has plans to invest in renewable energy sector of Pakistan. From Jul-Oct 2020 FDI from Italy to Pakistan reached 18.1 million US$, while total Foreign Direct Investment in Pakistan were majorly in Communication, Electrical Machinery, Power Generation, Pharmaceuticals and Textiles.
The Consulate of Italy in Karachi’s mission is also to promote Italo-Pakistani economic cooperation in different sectors (e.g. in the textile sector or agriculture or machinery sector) and it is our belief that Pakistan offers many opportunities of further economic cooperation and exchanges. To these purposes we have been working on deepening the cooperation in various fields on B2B and G2G level by encouraging an increased engagement of private and State-controlled businesses. Therefore, we work closely with Italian trade instruments.
Firstly, we have the Italian Trade Agency, which has been engaged in the past and is actively working in Pakistan under Dr. AmadeoScarpa. Another trade instrument is the Italian Development Committee, whose Honorary President is the Consul of Italy in Karachi, a trade body working to promote economic and commercial exchanges between entrepreneurs and business houses in Italy and Pakistan, aligned with the Italian System of Chambers of Commerce Abroad.
Furthermore, with the cooperation of Italian Agency for Development and Cooperation, the Consulate is working to enhance Italy’s engagement in Sindh and Balochistan in new fields, including promoting ‘Green Economy’ initiatives in all sectors. Around forty percent of Italian firms are either ‘Core Green’ – firms that produce environmental goods and services, or firms whose outputs have low environmental impact; or ‘Go Green’ - firms that are taking steps towards the greening of their supply chains and business practices. Italy is not only one of the leaders in Europe in green economy, but has a great position worldwide. We are a society with one of the most sustainable economies in the world and we want to collaborate with Pakistanistakeholders towards green economy.
To sum up, Italy and Pakistan enjoy excellent bilateral relations and look forward to enhance the existing ones in many fields in the years to come. The Consulate of Italy in Karachi is eager to develop our cooperation and to facilitate and welcome all Pakistani and Italian engagements to promote friendship and joint prosperity in our Countries!
Global Import 54,693,568.88 100.00% 44,485,401.73 100.00%
Imports from Italy 974,707.56 1.78% 489,670.37 1.10%
Global Export 22,986,460.65 100.00% 21,324,319.31 100.00%
Export to Italy 794,110.71 3.45% 728,852.06 3.42%
Copyright Business Recorder, 2021