Singapore and Pakistan to start FTA talks next month
Channel NewsAsia, Singapore
Singapore and Pakistan to Start FTA Talks Next Month
By Bharati Jagdish, Radio Singapore International
First broadcast: 11 May 2005
Prime Minister Lee Hsien Loong has said that Singapore and Pakistan will begin negotiations next month on a bilateral Free Trade Agreement.
Prime Minister Lee described current trade ties as “modest” in comparison with the city state’s links with other South Asian countries.
He noted that Singapore was already concluding an FTA with India and had begun exploratory talks with Sri Lanka, but had not yet made any progress with Pakistan.
Singapore’s trade with Pakistan totaled 1.02 billion US dollars last year making it Singapore’s 45th-largest trading partner.
For more on this, Bharati Jagdish (BJ) spoke to Prasenjit K. Basu (PKB), Managing Director of Robust Economic Analysis Pte Ltd in Singapore.
PKB: "Pakistan was not really on the radar screen of the world economy until about three or four years ago when the economic reforms under the current Prime Minister Shaukat Aziz began and Pakistan sorted out its external debt problems in the first couple of years after President Musharraf took office in a coup."
BJ: Can you tell us more about the current state of trade relations between the Singapore and Pakistan?
PKB: "Well, Pakistan is still a rather small trading partner of Singapore’s. Pakistan produces cotton textiles, sugar, rice, etc and exports some of these products to Singapore, but it has a fairly good appetite for Singapore products and services and so relations between Pakistan and Singapore would probably grow over time."
BJ: What would you say are the probable areas of cooperation between the two countries that we still haven’t fully tapped on?
PKB: "I think there’s a great deal of potential in areas like infrastructure development - power, roads, telecommunications - all areas in which Singapore has a lot to offer - from electronics, pharmaceuticals to banking services - all these things will be of interest to a developing country like Pakistan."
BJ: In terms of policies, legal regimes and frameworks, what is Pakistan like as an operating environment for foreign businesses?
PKB: "Well, Pakistan’s operating environment is very similar to that of India, Bangladesh and Sri Lanka. It’s based on an Anglo-Saxon model very much like Singapore. The legacy of English Common Law exists in all of these countries, but the legal system in these countries is a little more ponderous, slower, than in Singapore. Also, it probably lacks the depth of skilled personnel that you can get in India."
BJ: How can we get past this problem of a lack of skilled personnel?
PKB: "Well, it’s not entirely lacking. It just doesn’t have the same depth that India presents, but there is some sort of labour in virtually every level of skills in Pakistan, so I don’t think labour is going to be an important consideration for a new investor in Pakistan."
BJ: What would you say are the important considerations for a new investor?
PKB: "Well, I think Pakistan is a fairly fast-growing economy under the dynamic leadership of Prime Minister Shaukat Aziz. He’s welcoming foreign investments, but infrastructure bottlenecks are certainly a bit of a problem. Political stability over the medium and long-term is another issue that we have to be somewhat wary of and also, Pakistan is in a very volatile part of the world especially on its Western frontier where there is insurgent activity. But it has an environment now which is very welcoming of foreign investors and so opportunities for businesses are growing."
Prasenjit K. Basu (PKB), Managing Director of Robust Economic Analysis Pte Ltd in Singapore, speaking to Bharati Jagdish (BJ). -RSI
