TEXT: Switzerland and Pakistan have good, long-standing relations. The two countries have signed a range of economic agreements that have helped to develop bilateral trade.
Key aspects of diplomatic relations
There are numerous bilateral agreements between Switzerland and Pakistan covering a range of areas including investment protection, debt consolidation, aviation, double taxation as well as an exchange of information on financial accounts. Switzerland also engages in a regular political dialogue with Pakistan. The eleventh round of talks were held in November 2021 in Islamabad.
Economic cooperation
Switzerland and Pakistan enjoy good trade and economic relations. Switzerland has always been one of the top seven foreign direct investors in Pakistan. Major Swiss companies are present in Pakistan employing around 15,000 people. In 2021, Swiss exports to Pakistan amounted to approx. USD 398 million and consisted mainly of machinery, chemical and pharmaceutical products, and watches. Imports from Pakistan – mainly textiles, leather articles, and agricultural products – amounted to approx. USD 268 million.
In the framework of the Debt Service Suspension Initiative (DSSI) of the World Bank and the IMF, Switzerland has extended a delay in repayment of more than USD 9 million of debt to Pakistan.
Switzerland takes the problem of illicit financial flows very seriously. Switzerand is an active proponent of international standards to combat abuse and has implemented a number of measures to ensure the integrity of its financial centre. In 2021, the tax authorities of both countries implemented the automatic exchange of financial information (AEOI).
Cooperation in education, research and innovation
A joint event by the Embassy of Switzerland and the Ministry of Foreign Affairs of Pakistan was held under the Science Diplomacy Initiative of the latter on agricultural technologies related innovations for sustainable agriculture in August 2021. Swiss and Pakistani start-ups, experts from major universities in Switzerland and Pakistan joined the event.
Researchers and artists from Pakistan can apply to the State Secretariat for Education, Research and Innovation (SERI) for Swiss Government Excellence Scholarships.
Export and investment promotion
Switzerland provides effective support where needed to help Swiss companies with their international activities via the instruments of commercial diplomacy and export promotion.
As a trade-oriented, medium-sized economy, Switzerland is reliant on the open markets, legal certainty and predictability of a rules-based global economic system. In addition to the multilateral system, Switzerland concludes bilateral agreements – including free trade agreements, bilateral investment promotion and protection treaties and double taxation agreements – to enhance its access to foreign markets.
Switzerland's representations abroad are involved in negotiating and implementing these agreements. They can also advise and support individual Swiss companies in the context of export promotion and consular protection.
Free trade agreements
Free trade agreements (FTAs) are essentially intended to facilitate trade by reducing or eliminating trade barriers between two or more countries. Minimizing customs tariffs is a central element of FTAs. Many of them also govern services, investments and public procurement and contain provisions on sustainability.
SECO maintains an up-to-date list of countries with which Switzerland has signed an FTA.
Bilateral investment promotion and protection treaties
Bilateral investment promotion and protection treaties (BITs) promote investment by ensuring a certain degree of protection against non-commercial risks. These include state discrimination against investors from a partner country in favour of domestic investors, unlawful expropriation and unjustified impairment of payment and capital flows.
To date, Switzerland has signed over 120 BITs with countries in Africa, Latin America, Asia and Europe. SECO maintains an up-to-date list of Switzerland's BITs with other countries.
Double taxation agreements
Double taxation agreements (DTAs) prevent natural persons and legal entities from being taxed twice by dividing taxation rights in respect of the various types of income and assets between the signatory states. They are thus vital to the promotion of international economic activity.
Switzerland currently has DTAs with over 100 countries and continues expanding its treaty network. The Federal Tax Administration maintains a data base with state-related tax information.
Export promotion
Switzerland supports Swiss companies in developing their international business through the federally mandated export promoter Switzerland Global Enterprise (S-GE) as well as through its representations abroad.
S-GE's services are geared to small and medium-sized enterprises (SMEs). Its ExportHelp team is the first point of contact for administrative export-related issues of all kinds, but companies can also contact one of S-GE's country advisers directly.
The FDFA operates a network of Swiss Business Hubs in selected focus countries together with S-GE. These are integrated into embassies and consulates general and offer a wide range of services, including in-depth market analysis, business partner searches in target markets, and support for product approval.
S-GE – Offices around the world
Even in countries without a Swiss Business Hub, Swiss embassies and consulates general offer a selection of basic services comprising information, advice, referral, support for events and delegations, and consular protection. For more information on basic services, please see the tab «Services – Trade promotion for companies».
Promotion of Switzerland as a business location
On behalf of the federal government, Switzerland Global Enterprise (S-GE) informs potential foreign investors about Switzerland's specific strengths and operating conditions for business.
The Swiss Business Hubs are the first point of contact for foreign investors. Targeted communication is addressed to promising companies in industries such as robotics, artificial intelligence, advanced manufacturing, personalised health, and blockchain.
Foreign investors in countries without a Swiss Business Hub can contact S-GE in Switzerland directly.
Switzerland’s engagement worldwide
Swiss international cooperation is driven by the vision of a world without poverty and in peace, for sustainable development. Switzerland has earmarked CHF 11.25 billion for international cooperation in the 2021–24 period.
Swiss international cooperation alleviates need and poverty, reduces global risks and promotes peace. In Switzerland's International Cooperation Strategy 2021–24, the Federal Council has set out four objectives of equal importance:
- Economic development
Contributing to sustainable economic growth, market development and the creation of decent jobs.
- Climate change and the environment
Addressing climate change and its adverse effects and managing natural resources sustainably.
- Human development
Saving lives, ensuring quality basic services (especially in relation to education and healthcare), and reducing the causes of forced and irregular migration.
- Peace and governance
Promoting peace, the rule of law and gender equality
Through these objectives, Switzerland is also pursuing longer-term interests: a just and peaceful international order, stable economic conditions that support investment, a reduction in the causes of forced and irregular migration, and sustainable development worldwide.
Economic development
Switzerland's economic development cooperation seeks to contribute to economic growth and lasting prosperity. Decent jobs are a crucial part of this. Switzerland uses its own dual vocational education and training system as a point of reference in its development cooperation efforts in this field. In doing so, it fosters the skills that are in demand on the various labour markets in developing countries.
Swiss international cooperation also gears its activities towards the promotion of reliable economic framework conditions and private sector engagement. This helps partner countries integrate in the global economy. In doing so, Switzerland takes account of the opportunities offered by technological progress and digitalisation.
Climate change and the environment
Continued climate change is affecting millions of people. It can exacerbate extreme poverty and famine with phenomena such as natural disasters, rising sea levels and extreme drought.
Switzerland spends around CHF 400 million a year in this area in its international cooperation activities – an increase of CHF 100 million compared to the last period (2017–20) and around 15% of the entire international cooperation budget. It is therefore bolstering its commitment to mitigating climate change and adapting to its effects in developing countries.
Human development
Switzerland endeavours to save lives, ensure quality basic services in education and healthcare in particular, and to reduce the causes of forced and irregular migration. More than 70 million people worldwide have been forced to leave their homes as a result of armed conflict and persecution. Of these, 85% are in developing countries. Switzerland has an interest in reducing forced and irregular migration and in ensuring that refugees and migrants are better protected in their countries of origin and transit. International cooperation also addresses the root causes of irregular and forced migration, including poverty, armed conflict, poor governance, and the impacts of climate change. Switzerland is thus creating long-term prospects for local populations.
Peace and governance
Through its international cooperation, Switzerland promotes peace, the rule of law and gender equality. Respect for human rights, gender equality and equal opportunities for the disadvantaged, and a functioning state under the rule of law, are important to sustainable development. In its work, Switzerland also expects its partner governments to take responsibility, and helps them to fight corruption, clientelism and mismanagement. In doing so it strengthens civil society organisations in developing countries so that they are able to demand accountability from their governments and are better able to monitor the state's activities.
In addition, international cooperation fosters dialogue between conflicting parties engaged in peace processes. Switzerland always works towards achieving lasting peace that is acceptable to all of those affected. It has internationally sought-after expertise in areas such as mediation, federalism and dealing with the past.
Copyright Business Recorder, 2023
Comments
Comments are closed.