WASHINGTON: Now is the time to implement the “trade-not-aid” policy as establishing strong business ties is the best way to rebuild once close relationship with the United States, say the members of a Pakistani delegation visiting the US capital.
The delegation, which is the first to visit the United States since the new ambassador, Ali Jahangir Siddiqui, himself a businessman, came to Washington late last month. On Tuesday, they met senior US officials at the State Department and came back with the impressions that the Americans too want better trade relations with Pakistan.
But they told the delegation that “Pakistan must eradicate terrorism, in all its forms, to create a business-friendly environment,” said Kamran Nasir, CEO, JS Global Capital Ltd.
“They believe that to encourage investors, particularly from the United States, Pakistan must improve the security situation,” said Hubco’s CEO Khalid Mansoor.
State Department officials also reminded Pakistan that the Paris-based Financial Action Task Force (FATF) was already considering a proposal to censure Pakistan over its alleged failure to stamp out terrorism finance and stressed the need for Pakistan to take immediate measures for overcoming this problem.
As the United States had played a key role in placing Pakistan on FATF’s watchlist in February, the delegation felt after the meeting that Pakistan may be placed on the FATF grey list but would avoid getting blacklisted. Being placed on the blacklist could bring economic sanctions, which Pakistan wants to avoid.
“We are taking steps to stamp out terrorism financing,” said Nasir, “but being placed on the grey list is not the end of the world. We were on this list from 2012 to 2015 and yet our economy improved rapidly during that period.”
In their discussion with the Pakistani team, US officials also showed a keen interest in the China-Pakistan Economic Corridor (CPEC) and “we assured them that CPEC also creates a lot of opportunities for American businesses,” said Ehsan A. Malik, Chief Executive Pakistan Business Council.
Irfan Siddiqui, CEO Meezan Bank, said that CPEC’s focus was on building infrastructure, “which will create new investment incentives for all.”
The delegation explained to US officials that CPEC had set aside $36 billion for power generation and most of these projects were using “state-of-the-art” American equipment, such as GE motors and generators.
“So, there’s an enormous opportunity for US investments in CPEC-backed projects,” said Nasir.
The Pakistani delegation also presented statistics, showing that the United States was one of Pakistan’s a major trading partners. Statistics released by the US Census Bureau show that between January and April 2018, the US exported $1.077bn of goods to Pakistan while its imports amounted to $1.199bn. In 2017, US exported $2.8b worth of goods to Pakistani while imports accounted for $3.57bn.
The delegation explained to US officials that Pakistan was also a major victim of terrorism and that terrorism was not Pakistan’s invention as it came to South Asia during the cold war.
They explained that Pakistan was so far the only country to successfully fight back terrorism, creating an environment that was already encouraging foreign companies to invest in the country. They pointed out that 35 companies, including some from the United States, had already invested in Pakistan while more were coming.
Later, some members of the Pakistani delegation told media representatives that they also noticed some positive changes in the US attitude. The Trump administration was making changes that would allow US companies also to invest in coal-based projects, they said, adding that some US companies were already providing equipment for coal-based projects in Thar.
Richard Morin, CEO, Pakistan Stock Exchange Ltd, pointed out that a prestigious international evaluator, MSCI, reclassified PSX from a Frontier to an Emerging Market in May 2017 because of its performance.
He said that now was the best time to invest in PSX because of uncertainty in other markets.
He said that PSX had overcome the impact of the 2008 meltdown. “The market infrastructure is much better than what it was 10 years ago,” said the PSX CEO, noting in all 20 MSCI criteria, Pakistan had improved markedly.