Pakistan’s economy has been in the doldrums for quite some time due to dismal economic activities, precipitous deceleration in foreign direct investment and dwindling exports, to say the least. It’s about time that Pakistan signed Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC) countries in particular to ensure sound investment and better exports to the opulent GCC countries. In case such crucial agreements remain in abyss after the lapse of years, it would not augur well for the economic prosperity of the country. The hitches and hiccups need to be addressed for the timely implementation so that economic activities could be spurred.
Pakistan enjoys smashing relations with all the Gulf Cooperation Council countries comprising the UAE, Saudi Arabia, Bahrain, Oman, Qatar and Kuwait, however, trade and economic activities have not been explored to the full potential.
The FTA between Pakistan and the Gulf bloc is valued highly in the business circles of Pakistan and business community is looking forward eagerly to tap the export potential to the GCC countries. Once the FTA gets going, Pakistan would have great opportunity to export rice, meat, fruits etc. and could attract investment in the agro-processing unit in Pakistan in particular.
The bilateral trade between Pakistan and the United Arab Emirates is over $8 billion which makes the UAE as Pakistan’s largest trading partner in the Middle East. There is great potential to accelerate the bilateral trade to double the current volume of trade. Pakistan’s exports could augment substantially in multifarious sectors. Over two million Pakistani diaspora in the UAE contribute around $4.5 billion annually to the GDP of Pakistan through remittances. The Prime Minister of Pakistan Imran Khan’s recent meetings with His Highness Sheikh Muhammad bin Zayed Al Nahyan and His Highness Sheikh Muhammad bin Rashid Al Maktoum were focused on augmenting economic ties for mutual benefits of the two brotherly countries. The FTA would further the economic activities dramatically. The UAE could invest even more in infrastructure, real estate industry, banking, telecommunications, insurance, aviation and energy sectors.
The current bilateral trade between Pakistan and Saudi Arabia stands at $3.4 billion which could skyrocket provided that the potential of export from Pakistan to Saudi Arabia is identified and the hitches are removed which have actually reduced the volume of trade instead increasing it.
The recent visit of the Saudi Crown Prince Mohammed bin Salman to Pakistan got Pakistan a ‘record investment package’ which would help Pakistan to great extent in terms of tackling its economic woes and the $6 billion loan at an interest rate of 3 percent has helped Pakistan stave off a balance of payments crisis. The Saudi government is going to establish a $10 billion oil refinery in the port city of Gwadar, which is one of the largest investments in the history of our country in the energy sector. The FDI from Saudi Arabia to Pakistan is expected to increase manifold in the future owing to the recent developments, however, the FTA would be vital in this regard. Pakistan diaspora in Saudi Arabia remit around $5.6 billion annually which is a great source in terms of sustenance.
Pakistan is Qatar’s 13th largest trading partner. The bilateral trade volume between Pakistan and Qatar is approximately $2 billion and Pakistan is one the leading buyers of Qatar’s LNG and petrochemicals. Food and consumer products comprise over half of the current exports from Pakistan to Qatar. Pakistan has to look into enhancing its exports to Qatar through pharmaceuticals, construction, shipping and maritime sectors. Qatar could invest in Pakistan’s Special Economic Zones under the CPEC and for joint ventures.
Pakistan has been importing aluminum rods, aluminum tubes, aluminum wires, scrap iron, rice, cotton textiles, raw cotton, propane sheets, frozen shrimp, frozen beef & mutton, fresh fruit and vegetables from Bahrain whereas Pakistan’s exports to Bahrain comprise animals, minerals, food products, chemicals, plastic, wood, textile and clothing, footwear, stone & glass, metals and transportation machinery etc. Pakistan could attract whopping investment from Bahrain in Halal products since Bahraini businesses are involved in Halal products which is a $4 trillion annual Halal business industry ranging from food, fashion, and consumer items to beauty products.
Kuwait intends to invest enormous amount in its ‘Vision 2035’ and the initial spending is believed to be around $100 billion. This could be a great opportunity for the Pakistani businesses. Pakistan’s ever-increasing trade with the oil-rich Kuwait which is surrounded with Saudi Arabia, Iraq and Iran could open new opportunities for the development of the trade in the region. Kuwait imports from the United States, China, Saudi Arabia, Japan and other Gulf countries. Pakistan has got an opportunity to increase its exports with prudent thinking and ensuring international practices in its trade.
It is believed that about 30% of the Omanis originate from Pakistan’s province of Balochistan. This is a great opportunity for Pakistan to export products to Oman. Pakistan could and needs to enhance its export of garments, pharmaceutical, engineering, agricultural etc. to Oman.
To conclude, the FTA between Pakistan and the GCC countries is going to open the doors of economic prosperity for the economy of Pakistan.