Pakistan Turkiye: Vast prospects of trade and mutual cooperation

Pakistan and Turkiye are two brother countries, have historical longstanding, deep-rooted and very close relations. This relationship is based on mutual understanding, cooperation, trust and both are tied with strong Islamic brotherhood and values. Pakistanis love Turkiye, its people and leadership similar is the case with Turkiye and its people who have great regard for Pakistan and Pakistanis. Pakistani are always received deep love and sense of friendship from their Turkish brothers.

There is a dire need that these friendly and brotherly relations must be turned into strong economic and trade relations. Existing trade volume is far below than its potential. Turkiye is a country of 85 million people and Pakistan is a country of 240 million people and there are immense opportunities to increase bilateral trade and investment. Therefore, it is very important to bring the business communities of both the brother countries closer. Although Pakistan and Turkiye established their diplomatic relations in 1947 about 75 years before but both countries relations could be seen much before independence when one of very important leader of Pakistan Movement, “Maulana Muhammad Ali Johar” started Khilafat Movement to support Turk brethren. Turkish trade relations with this region started in 9th century, so it is centuries old relations and both countries peoples’ hearts beat together and they are two countries but one nation. Turkiye and Pakistan have many similarities in culture, religious values, hospitality and those who visited Turkiye they shared their experience with me and told me that they never felt strangers or foreigners in Turkiye and were so comfortable that they thought and felt they are in their own country. In the year 2023 total exports of Turkiye were around US$ 256 billion which comprised 55% to European Union countries. Turkiye’s Custom Union Agreement (CUA), which was signed twenty years ago, is going to be updated this year which will open the new doors of opportunities for Turkiye and those countries which are having trade partnership with it. Turkiye will have more access to those country which signed Free Trade Agreements (FTAs) with European Union. Therefore, there is a great chance for Pakistani exporters to export semi-processed raw material to Turkiye which can be processed in Turkiye and can be re-exported to EU countries with zero tariffs. Although Turkish investment in Pakistan is US$ 2.5 billion but it is far below than its potential so there is a need to do serious efforts to enhance Turkish investment in Pakistan.

It is interesting to mention that Arcelik is the only Turkish company which has established a Research and Development center in Pakistan which is a welcome move as there are many foreign companies , working in Pakistan but none of them have research and development ( R & D) center. There is a need that Turkiye which is advance in modern technology help Pakistan in technology transfer. There is a huge opportunity of investment in dairy sector and meat processing as Pakistan despite producing huge quantity of milk, has been able to process only three percent of it. Pakistan introduced Special Investment Facilitation Council (SIFC) to facilitate investors and there is a hope that now it is much convenient and easier for foreign investors to come here and take advantage of Pakistan’s business and investment friendly policies. Arcelik has invested about US$ 800 million in Pakistan since 2016 and has not remitted anything outside Pakistan as whatever it earned reinvested in Pakistan.

Pakistan is a country having sixty percent youth in its population and these youth are highly talented, energetic and there is a need to provide them necessary guidance and to facilitate them. Turkish educational system is much better and advanced than many countries and there is a great scope for Pakistani students to apply in Turkish universities and acquire higher education. Turkiye has twenty-eight Pak Turk Schools in Pakistan where thirty thousand Pakistani students are studying and getting quality education. This is a great service for Pakistan from our Turk brothers. Turkiye is also providing scholarships to number of Pakistani students and last year 168 scholarships were provided to Pakistani students.

Last year Pakistan exported goods of a value of US$ 323 million which is far below than its potential. There is a need to do serious efforts to enhance this export volume to US$ one billion. Pakistan has a population of 240 million with 60% youth, a GDP of US$ 339 billion therefore it is a country with great potential. Turkish investors must be invited in sectors like Halal food, Islamic banking, energy, affordable housing, transportation, agriculture, infra structure development, education and telecommunication. There is need to sign Free Trade Agreement (FTA) with Turkiye. The process in this regard must expedited. China Pakistan Economic Corridor (CPEC) and Special Investment facilitation Council (SIFC) are effective tools to stimulate domestic and international investment . Turkish companies can explore joint ventures in Special Economic Zones ( SEZs) under the umbrella of CPEC which will further enhance economic relations with brother country Turkiye. There is also a dire need to establish mutual cooperation and linkage between Pakistani and Turkish universities.

Economic Data
2017 2018 2019 2020 2021 2022 2023
GDP US$ billion 2,282.3 2,406.5 2,468.7 2,546.9 2,953.9 3,352 3,613
GDP Per Capita US$ 10628 9508 9133 8162 9528 10622 13383
Real GDP Growth % 7.5 3.00 0.9 1.8 10.9 5.5 4.00
Inflation 11.1 16.3 15.2 12.3 19.6 72.3 64.8
Exports US$ billion 157.1 168.0 170.4 169.6 225.7 254.2 255.8
Total Imports 233.8 223.0 198.3 219.5 271.4 364 361.8
Trade balance (76.7) (55) (27.9) (49.9) (45.7 (109.8) (106.8)
GDP composition
%
Agriculture 8.1
Industry 27.6
Services 67.6

Pakistan Turkiye Statistics
Year Exports million US$ Imports million US$ Total Trade US$ million Balance of Trade US$ million Total Exports of Pakistan US$ billion % share in total export of Pakistan Total Import of Pakistan US$ billion % share in total import of Pakistan
2017 32.31 352.2 675.3 (29.0) 21.912 1.5 57.52 0.6
2018 330.7 462.2 793.6 (131.5) 23.78 1.4 60.39 0.8
2019 306.3 550.2 856.5 (243.9) 23.82 1.3 50.51 1.1
2020 268.8 620.2 888.9 (351.4) 22.23 1.2 45.78 1.4
2021 314.8 773.1 1008.0 (458.3) 28.88 1.1 73.11 1.1
2022 345.25 818.77 1,164.02 (473.52) 31.8 1.08 82.28 0.99
2023 323 860 1,183 (537) 33.00 0.97 83.00 1.03

Source PBS, SBP, TDAP
Export partners
%
Germany 9.6
UK 6.1
UAE 5.9
Iraq 538

Export Commodities: Automobile, Apparel, Textiles,
Electronic appliances, transport and
Equipment

Import Commodities: Machinery, chemicals, fuels
Import Partners
%
China 10
Germany 9.1
Russia 8.5
USA 5.1