Pak-Germany relations: On the way to tomorrow

Courtesy:- Muhammad Nawaz Verdag

The Pak-Germany relations refer from the history of friendship and cooperation from the late 1940’s till date very firm. Both countries are tied to each other in effect of their historical, economical and financial development cooperation that initiated between Pakistan and Germany from 1961, “with trade investment exceeding $ 2.3 billion”. Germany’s interest, engagement and commitment for Pakistan have grown significantly with the passage of time.

The importance of Pakistan as a country of central strategically importance and with a huge potential for trade and investments has become more and more in the last decade. Therefore it is not by chance that in the last three years alone many visits from Germany took place in Islamabad. A couple of weeks ago Foreign Minister Hina Rabani Khar visited Berlin. On 4th September Pakistani Foreign Minister and her German counterpart, Foreign Minister Guido Westerwelle, launched a road-map for the strategic dialogue between the two countries. They agreed to further intensify the bilateral relations. This road-map includes very practical elements such as improving business to business contacts and enhancing the conditions for foreign investments. And it also aims at the other topics such as bilateral university exchanges, promotion of interfaith dialogue and collaboration in research and development.
In this context both countries continue to work on inter-parliamentary and civil society dialogues as well as on fostering the development cooperation. The German business community is looking with huge interest to Pakistan, an emerging market over 180 million people. Pakistan offers a lot but there are also a number of challenges, for instance the energy crisis has to be solved soon and a tax reform is needed to guarantee that Pakistan will be able to invest in its infrastructure. Nevertheless, there is a growing interest from a number of small and medium sized companies working in the sector of renewable energies or in the agro-business. Over 50 German companies took part to inform them and an agro-business delegation is on the way to Pakistan.
German welcomes the granting of autonomous trade concessions to Pakistan by the European Union. The Pakistani business community should take advantage of this opportunity. The European Union (EU) is an important aspect of bilateral relations. German has always supported the Pakistani efforts to get greater access to EU markets including the recently approved Pakistan specific autonomous trade preferences. Germany would continue to be an advocate of Pakistan within the European Union.
Encouragingly, Germany has now become the largest trading partner of Pakistan in Europe and fifth biggest source of foreign investment in the country. Several German multinational have been making lucrative businesses in Pakistan for decades.
In recent years trade and economic cooperation have become important factors in the deepening of Pakistan-German relations. Germany is the largest trading partner of Pakistan within the European Union. German Federal Statistical Office show that Pakistan’s exports to Germany increase by over 76% while bilateral trade volume increased by 2% during the past4 years. On the investment side, many German companies have identified business opportunities to Pakistan’s economy have to offer. Foreign Direct Investment (FDI) flows from Germany into Pakistan increased over the past years. Germany has become one of the major sources of foreign investment in Pakistan.
Incentives to mutually invest in each other’s economies are incorporated in the “Agreement on the Encouragement and Reciprocal Protection of Investments” which was signed on December 1, 2009. Bilateral economic ties have also been strengthened by business-to-business contacts which have been continuously rising in recent years. Increasing companies of Pakistan are attending trade fairs in both countries.
In this energy sector German power companies are working on several projects. German enterprises in harnessing coal could be valuable in building the capability of our coal fields. There could be more involvement of the German energy companies in generation hydel power through construction of small and medium sized plants to meet the energy shortage in the country.
Besides, renewable energy is the potential significant sector as there is enormous scope for business given the need to diversify energy sources in Pakistan to cope with the increasing electricity shortage. Thus, investments are needed in Pakistan to produce solar and wind power. German companies are keen t invest in supporting the growth of Pakistan’s renewable energy capacity.
Apart from energy, there are increasing opportunities to intensify trade in agriculture goods between Pakistan and Germany. To take advantage of this favorable environment there has to be greater focus to improve the quality of agriculture products from Pakistan with greater technological inputs. Furthermore, regulatory measures need to be more stringent to meet specific conditional ties, especially to meet environmental requirement for the sale of agricultural items.
Relations between Pakistan and Germany have further been upgraded by launching the first ever Strategic Dialogue. The Road Map for the Pakistan-Germany Strategic Dialogue signed in Berlin by the foreign ministers if the two countries aim at enhancing the multifaceted cooperation between the two countries in all key areas, including trade, economic and investment relations. Germany has been viable economic partner of Pakistan. As provided for in the Roadmap for strategic dialogue, the two countries look forward to strengthening bilateral ties, including people to people contacts.
Adding the benefit of exports, Pakistan’s German export contributes to the country’s economic growth. Besides the presence in presence in Pakistan of some of the leading companies there is increasing scope for small and medium-sized German enterprises to invest in Pakistan’s promising areas such as power, renewable energy, agriculture, information technology and technical textiles. Pakistan is also increasingly benefiting from Germany excellent and well known universities. At present, there are about 2300 Pakistanis studying in Germany. This is one area in which offers enormous opportunities.
On the regionally level, German appreciates Pakistan’s sacrifices in counter-terrorism and the constructive role Pakistan has been playing in promoting peace and stability in Afghanistan. There is convergence of views on the need to accelerate the peace process in Afghanistan but on a whole German too wants tranquility and stability in Afghanistan.
Indubitable, Pakistan Germany relations have been built on solid foundations to withstand pressure of all kinds. Interestedly, Pakistan Germany relations predate the former’s emergence on the world map. Germany considers Pakistan as an essential partner visa vice Pakistan’s contribution too will continue to be indispensible for the stability and balance f the entire region. Moreover, the contemporary era is an opportune moment to work for the expansion of Pakistan-German strategic, trade and economic cooperation

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