PAKISTAN: THE NEW ASIAN TIGER?

1995

Considered as a long term ally of Turkey, Pakistan is one of the most populous countries in the World with its estimated population around 180 million. The Pakistani rupee has seen a rise in its value the last few weeks indicating the things are going on a good path under the new government which came to power in June 2013. Although it is located in a critical region, Pakistan aims to continue and strengthen stability in the region; the country has already started doing peace talks with Taliban. Our interview with the Ambassador of Pakistan in Turkey, Haroon Shaukat indicates that Pakistan’s long term plans are to sustain stability and continue its growth while strengthening its relations with Turkey in all areas.

-Can we talk a bit about the friendship between Pakistan and Turkey?
The relation between Turkey and Pakistan is a very special relationship. It is a relationship that goes deep into history, a relationship that goes into the heart of every Pakistani and every Turk. It is a relationship that goes beyond history because there are many countries that we share common history but with Turkey, we also share common values. We also share a common culture. If you were to sit with a Pakistani family, or if a Pakistani were to sit with a Turkish family, you would see that we are struck by the commonality of the values despite the fact that we speak different languages, despite the fact that we are located in two very different geographies. Turkey is more close to Europe, is more open to Western ideas, you have a tradition of Western culture, starting from the time of the great leader Atatürk, who is a common leader for both Pakistan and Turkey. We on the other hand, in South Asia, are in a more conservative environment, in a more closed geography. So despite these differences, our values are very similar. How young people respect the elders, how we act on a dining table…You know the habits are the same. We don’t share this with many other countries even if they are Islamic, even if they are in the neighborhood; with Turkey it is very special.

In the last few years there has been a very fundamental shift in our bilateral relations. We had excellent political relations with all governments in the past but every since the new government has taken power in Pakistan, they have took a very sharp focus on the economic and commercial side of the relationship. Now we officially call this relationship a strategic partnership. In this there is a very clear emphasis on the commercial and economic sides.
Now this is taking place on two levels; one is government to government, the other is private sector to private sector –or public private partnership. We have had in the last six to eight months, a series of meetings with very large Turkish companies, with the Pakistani leadership-the Pakistani Prime Minister, leading Pakistani ministers, the chief minister of Punjab, chief ministers of other provinces as well. These companies are interested in energy progress in Pakistan, infrastructure, municipal services like solid waste management, like cleaning the cities, metro buses, public transport buses etc…So I think all the different stages have led for this relationship to take off. We are hoping that in the following months we will have very substantial investments from the Turkish private sector in Pakistan.

At the governmental level, the Turkish Exim Bank has set aside three hundred million dollars for investment projects in Pakistan. We hope to see more and more Turkish companies in building highways in Pakistan, motorways in Pakistan, perhaps construction of airports, energy projects, large dams, small dams, wind energy- Turkey is the pioneer of wind energy projects in Pakistan…So this is the overall framework of the relationship, I think we can take a great deal of satisfaction with this trend and trajectory of relationship which is supported with a very strong political will on both sides.

-Do you think both countries will benefit from diplomatic partnership in the future?
Yes, indeed. You know as I was saying, we are two important countries in two strategic geographies. Look at the location of Turkey. Turkey has one fourth in Asia and one in Europe; you control the two strategic straits to the Black Sea. At the time of the Cold War, everybody understood the importance of Turkey, as a partner of NATO. Now with the problems in Ukraine all of a sudden, Turkey’s strategic importance is back on the map. Look at your location vis-à-vis the Middle East, look at your location vis-à-vis Central Asia…Therefore we can say that Turkey is a very strategic country. Likewise Pakistan is in the crossroads of Middle East, Central Asia and South East Asia. We are neighbors of two of the most reputable economies, China above all and also India. Across Afghanistan and Central Asia we have the third emerging power which is Russia and we are located on an energy crescent; from Middle East to Iran and Central Asia. It is an area not only rich in energy but it is an area also rich in minerals. It is perhaps the future of the economic activity. We have very positive credit emerging in our part of the world.
At this point, it is important that Pakistan and Turkey become two economically and politically strong and stable countries and hence become fact of stability in to the Middle East region.

-What do you have to say about the role of Pakistan about the stability in the region?
Pakistan can be a very stabilizing factor, we are a large country, we unofficially have 180 million people and in reality this number maybe higher. We are very strategically located; we have problems in our neighborhood, in Afghanistan. Pakistan has a key role in promoting peace and stability and Pakistan is also a critical factor perhaps for the regional prosperity. The Chinese are committing in a very big way to Pakistan, the Prime Minister is scheduled to go to China in the coming weeks. China has committed nearly thirty billion dollars of investments in Pakistan in the last seven years, which nearly makes four and a half billion dollars a year. China is interested in its Western region, which is taking them to the energy sources of the Middle East, of the wealth region. Other regional friends have been assisting partners. Pakistani rupee has gained around %10 of value in the last few weeks.
-Do you think this increase in value of Pakistani rupee will be long term?

Yes. There are a number of factors which are combined to give its strength. Pakistani rupee had dropped to hundred and ten rupees to a dollar. Then it came below hundred which means clearly around %10 of appreciation. I read the statement of the Prime Minister. He desires that the value of the rupee should remain from 98 rupees to 100 rupees. There is reason for us to believe that it will stay this way because if the rupee gains too much value it can affect the exports. If it loses too much value, it generates inflation and other instabilities in the economic arena. A good fiscal discipline, a good monetary policy and broad based macro economic initiatives can keep it stable. We have a very good reason to believe that we are on a very good path. In the last 3-4 months, in the last quarter, our economic GDP growth rate surpassed 5% while the projection was 3,5%. This is not an annual rate so it is too early to start celebrating. But the minister of finance has very clearly stated that the policy is to bring it up to 6-7% in the next two three years.

Now, imagine a country with the size of Pakistan which has 180 million people. We start to grow at a rate of 6%, which will happen. This means an explosion of requirements; energy requirements, it is an explosion of the infrastructure requirements. You will need more roads, you will need more airports, you will need more efficient ports, and you will need more efficient banking. All of this must go hand in hand. Pakistan can be and it is likely to be, an Asian tiger in the next few years. We are very hopeful and we are also very hopeful that the situation in Afghanistan will stabilize, 2014 is a very critical year. I hope that we can also make significant progress on curbing the menace of terrorism in the country- on which very serious initiatives are on the way to resolve it. If we manage to improve significantly one of these situations within the country, if the external environment improves such as in Afghanistan, we are already making all our best efforts to have good neighbor relations with all our neighbors including India.

We also have to remember that Pakistan has a very large population and the social development is also very important. We have a large segment of population which is under the poverty line; we need social services like education, like health, like communications…So it is a very big challenge for the government. It is not very easy. But I hope and I am very happy to see that all indications show that we are on a good path.
-Do you have any comments regarding your relations with your neighbor India?

We have a very checkered history with India. I do not need to go into history. There is a history of complex the history of problems…But Pakistan is very sincerely interested in resolving all outstanding issues with India, especially the issue of Jammu and Kashmir. These are seriously complicated issues; we can compare this to the old issues of Palestine, as well as your issues in Cyprus. No single problem has a very quick fix when there are the political strategic interests of countries involved. Having said that, the current government has made very clear indications that we want normal, good neighbor relations with India and we want the relations to grow and at the same time we want progress on resolving the outstanding issues. So I think we are placed in a good situation where we can hope that we have already let the most part behind us.

-Do you have anything else to add?
I want to take this opportunity to comment through your magazine, a message to our Turkish brothers, and a message to the Turkish corporate sector. They should look towards Pakistan; it is an area that offers different kinds of investment opportunities, very attractive trading opportunities. Pakistan has a very significant concession called the GSP Plus from the European Union, which means that a range of our textile products will be exempt from duties in the next three years which means that we will reach a textile boom in Pakistan, which means that our exports will gain growth and our textile industry will be back on its feet. Many of the Turkish textile companies which are not doing good business, which are finding it hard, it is a good opportunity for them to consider relocation in Pakistan. In today’s globalized world this is very common. There are good trading opportunities available, there are good investment opportunities available and many Pakistanis are looking forward to do business with Turkey.
My own conviction is that the economic and commercial relations are essentially driven by the private sector. The governments provide good enabling environments, the governments provide good framework in which it becomes easier for the private sector to interact, exchange commercial interactions. So we hope that the coming weeks in Turkey result in happy election results, that the political stability and economic prosperity that Turkey has enjoyed over a decade continues uninterrupted and we have our very best wishes for the future of Turkey and also Pakistan.

By Ceren Saydam

Courtesy – Diplomatic Observer

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