I am delighted to be in Pakistan for my third visit as the British Prime Minister’s trade envoy to Pakistan, ahead of what will be a very busy few months for UK-Pakistan relations. Many people talk about the joint history of the UK and Pakistan, but I am more excited about the future. There is no other country that has such a unique connection to Pakistan as the UK and, in particular, I can see how important the economic and trading links are between our two countries. As a British-Pakistani, I am proud to be able to promote even further the strong links between our two countries.
It is no surprise that the UK is Pakistan’s largest export market in Europe, but what many do not know is this year the UK has just overtaken China to become the second-largest in the whole world. UK-Pakistan bilateral trade in 2017 was £2.9 billion; with Pakistan exporting £1.8 billion of goods and services to the UK and the UK exporting £1.1 billion of goods and services to Pakistan.
The UK is also Pakistan’s third largest-source of foreign direct investment — and accounts for eight per cent of foreign direct investment into Pakistan. Both the UK and Pakistan win through trade, but the British market for Pakistani goods and the UK investment in Pakistan are responsible for thousands of jobs in Pakistan. It’s a strong record, but one I am personally committed to improving.
People often forget the scale of the UK’s business presence in Pakistan, with other 120 British firms operating and investing in Pakistan. Major UK businesses succeeding in Pakistan include Mott MacDonald in infrastructure development, which played an integral role in the development of the new Islamabad Airport; consumer goods Company Reckitt Benckiser; Standard Chartered and UBL in banking; pharmaceutical company GlaxoSmithKline; and Shell in oil and gas. There are also a fantastic range of UK brands represented here, including Debenhams, Toni & Guy, Monsoon & Accessorize in retail.
However there are challenges that hold back further trade and economic development. Pakistan’s current business environment holds back economic development and deters foreign companies, including those from the UK, from trading and investing. Making improvements to the ease of doing business is essential for Pakistan’s economic success, and the UK is trying to help. Currently, the British government is supporting the World Bank to help the Federal, Punjab and Sindh Governments in targeting, coordinating and communicating reforms to improve Pakistan’s business environment and attractiveness to foreign investors. We are also committed to doing more, and aim to work with the new government to creating a healthier, more easily accessible business environment both domestically and internationally.
The second challenge for Pakistan is that despite living in a region that has vast trading potential, it is one of the least interconnected parts of the world. Between major population centres to the East and West, and energy- rich states to the North and the Southwest, its geographical location gives Pakistan huge potential. The UK believes that CPEC offers great potential to Pakistan, but to unlock even greater growth, Pakistan must open up trade — north, south, east and west.
The UK is committed to working with Pakistan on fulfilling its potential, and as we leave the European Union, the United Kingdom is seeking free trade agreements with newly emerging and fast growing economies, particularly our oldest and closest partners, such as Pakistan. This is in Pakistan’s interest too. By trading with the UK, Pakistan has access to the world’s fifth-largest economy and second-fastest growing major economy last year. We rank in the top six countries in the world as a place to do business. We have record employment levels, and are ranked fourth globally in Good Country Index, with world-class education, business support and culture. All of this makes for an attractive trading partner for Pakistan.
While we are proud of the strong trade links between the UK and Pakistan, we believe we could be doing much better. With the potential of Pakistan’s economy, the history of strong economic ties, and the UK’s unique understanding of Pakistan, we think that the UK and Pakistan should be making a step-change in their trading relationship, to the benefit of both countries. We are ready to work for that vision alongside the people, businesses and the Government of Pakistan.
Published in The Express Tribune, September 14th, 2018.