• Insists that Pakistan should increase foreign exchange reserves and not take on new loans to pay off old ones
• Construction of an irradiation facility for the export of mangoes to the USA
WASHINGTON: Pakistan must end this practice of sending its economy to the intensive care unit (ICU) to revive, says Commerce Minister Syed Naveed Qamar.
The minister made the statement on Friday at a press conference at the end of a three-day visit to Washington, during which he also represented Pakistan at the official trade and investment conference.
“We need to end this cycle of borrowing to pay back loans. We need to increase our foreign exchange reserves. We need to control the budget deficit,” Mr Qamar said. “We must strengthen trade and encourage investment.”
Acknowledging that the national economy was going through a very difficult period, the minister said: “We must end this practice of sending our economy to intensive care every now and then.”
The US and Pakistan held the 9th meeting of their Trade and Investment Framework Agreement (TIFA) on Thursday. A joint statement released after the talks said both sides are keen to optimize their trade and economic ties.
Both sides also recognized the importance of agricultural and digital trade to US-Pakistan economic relations and agreed to intensify engagement in these areas ahead of the next TIFA Council meeting in 2024.
After almost eight years, the 9th session of the TIFA talks took place.
“These were supposed to be annual meetings, but for one reason or another they have been put on hold for so long. Now that we’re starting, there are many areas where we expect some breakthroughs, and on both sides,” the minister said. “Now that we have resumed talks, we hope to move further forward.”
“Trade and investment,” replied the minister when asked how Pakistan could strengthen its economy. “It takes time, but that’s the only option.”
In response to another question, he said the US had agreed to provide guarantees on letters of credit (LCs) issued by Pakistan because “some of our LCs were rejected”.
Pakistan, he said, is looking for breakthroughs in the agriculture and information technology sectors, and at the TIFA talks “we discussed many options to achieve that goal.”
mango exports
The minister said Pakistan has already set up a food irradiation facility to export its mangoes to the US and Washington has agreed to send a team of inspectors to review the agreement.
“Once it’s ready, we’ll be able to increase mango exports to the US,” he said.
Previous attempts to export mangoes failed because all mangoes had to be shipped to Indiana for irradiation and the cost was prohibitively high. Irradiated mangoes were sold for up to $5 a piece, a price consumers felt was too high.
The minister said Pakistan had also sought and secured US cooperation on seed production and imports of new citrus varieties from the US at the TIFA talks.
Pakistan’s famous Kinno oranges were also imported from California. “Yes, the Kinno project was a remarkable success, but now we are looking for new varieties that are very successful in the US and European markets,” said Mr. Qamar. “We also seek their cooperation in improving our cotton and potato production.”
The minister said there was “tremendous scope” for digital trade between the United States and Pakistan, adding that Islamabad had also approached US companies to explore the possibility of investing in Pakistan.
Digital trade between Pakistan and the US totaled $1.4 billion last year, 80 percent of which was with companies in California. US and Pakistani entrepreneurs worked on more than 3,600 projects.
economic stability
The minister said Pakistan is also seeking foreign direct investment, “but the FDI will only come if we have stability. In the meantime, we need to focus on bilateral trade with different nations.”
He stressed the link between stability and economic growth, saying that “political instability discourages investment, as does lack of security”.
The minister said this is the election year and therefore the political parties are “making all sorts of declarations” but once the election is over the situation will stabilize.
Asked if he was certain elections would be held this year, Mr Qamar said he was but asked journalists not to link his statement to the court proceedings surrounding the Punjab and KP provincial elections.
The minister also praised the government’s decision to let the market determine the exchange rate. “The previous policy of interfering in the process was wrong,” he said.
Published in Dawn, February 26, 2023
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