• Insists Pakistan should boost forex reserves and not take new loans to pay old ones
• Sets up an irradiation plant for exporting mangoes to US

WASHINGTON: Pakistan needs to end this practice of sending its economy to the intensive care unit (ICU) for resurrection, says Commerce Minister Syed Naveed Qamar.

The minister made this statement at a news conference on Friday, 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 taking loans to repay loans. We need to increase our foreign exchange reserves. We need to control the budget deficit,” Mr Qamar said. “We need to enhance trade and encourage investment.”

Acknowledging that the national economy was passing through a very difficult phase, the minister said: “We need to end this practice of sending our economy to the ICU every now and then.”

The US and Pakistan held the 9th meeting of their Trade and Investment Framework Agreement (TIFA) Council on Thursday. A joint statement issued after the talks said that both sides were seeking to optimise their trade and economic ties.

The two sides also recognised the importance of agricultural and digital trade to the US-Pakistan economic relationship and agreed to intensify engagement in these areas in advance of the next TIFA Council meeting in 2024.

The 9th session of TIFA talks was held after almost eight years.

“These were supposed to be annual meetings, but for one reason or another, they have been on the back burner for so long. Now that we are starting, there are many areas where we expect some breakthroughs, and that is on both sides,” the minister said. “Now that we have resumed the talks, we hope to continue moving ahead.”

“Trade and investment,” said the minister when asked how Pakistan could strengthen its economy. “It takes time, but this is the only option.”

Responding to another question, he said that the US has agreed to give guarantees for letters of credit (LCs) issued by Pakistan, as “some of our LCs were turned down.”

Pakistan, he said, was looking for breakthroughs in agriculture and information technology sectors and at the TIFA talks, “we discussed many options for achieving this goal.”

Mango exports

The minister said that Pakistan has already established a food irradiation plant to export its mangoes to the US and Washington has agreed to send a team of inspectors to review the arrangement.

“Once, it’s done, we will be able to enhance mango exports to the US,” he said.

Previous efforts to export mangoes failed because all mangoes had to be transported to Indiana for irradiation, and the cost was unbearably high. Irradiated mangoes were sold for as much as $5 apiece, a price the consumers found too high.

The minister said that at the TIFA talks, Pakistan also sought, and was assured of, US cooperation in seed production and for importing new citrus varieties from the US.

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 have been very successful in the US and European markets,” Mr Qamar said. “We are also seeking their cooperation in improving our cotton and potato productions.”

The minister said that there’s “tremendous scope” for digital trade between the United States and Pakistan, adding that Islamabad has also approached US companies to explore the possibility of investing in Pakistan.

The digital trade between Pakistan and the US stood at $1.4bn last year, 80pc of which was with companies in California. US and Pakistani entrepreneurs were working on more than 3,600 projects.

Economic stability

The minister said Pakistan was also seeking foreign direct investment “but the FDI will only come when we have stability. Meanwhile, we have to focus on bilateral trade with various nations.”

Underlining the link between stability and economic growth, he said that “political instability discourages investment, as does the lack of security.”

The minister said this was the election year and that’s why political parties were “making all sorts of statements” but once the election was over, the situation would stabilise.

Asked if he was certain that elections will be held this year, Mr Qamar said he was but asked journalists not to link his statement to the court cases about provincial elections in Punjab and KP.

The minister also praised the government’s decision to let the market decide the exchange rate. “The previous policy, of interfering in the process was wrong,” he said.

Published in Dawn, February 26th, 2023