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FY 1999: Pakistan |
I. EXECUTIVE SUMMARY This Country Commercial Guide (CCG) presents a comprehensive look at Pakistan's commercial environment, using economic, political and market analysis. The CCG's were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. The CCG's are prepared annually at U.S. embassies through the combined efforts of several U.S. government agencies. Pakistan is in a period of major economic and political uncertainty but will continue to offer a challenging market for U.S. exporters and investors. Prior to nuclear testing, and the resulting sanctions, the U.S. stood an excellent chance to further strengthen trade and investment ties with Pakistan. Though, Pakistan's overall and business attitude toward the United States remains quite positive, bilateral trade and investment could expand further if the Government of Pakistan can rationalize its policies, improve its financial position, and strengthen its economy. By some estimates, Pakistan has an immediate requirement for up to $20 billion in infrastructure development that could provide selective opportunities for U.S. exports and investment. A major privatization effort in the telecommunications and financial sectors should offer additional markets for our services, products and investors. Pakistan will also require sophisticated machinery, notably in textile production, as it upgrades low value-added products and develops additional export markets. In addition, Pakistan International Airlines also plans to replace its aging fleet of wide-bodied aircrafts. Sales to Pakistan's government organizations, however, will be limited due to shrinking foreign exchange reserves and an acute shortage of government funds. Most potential investors in Pakistan are faced with many of the same challenges that exist in other developing economies. The biggest challenge facing American firms in Pakistan is lack of transparency in government decision-making, coupled with allegations of systemic corruption. Lack of effective legal protection affecting both foreign and local companies is also of concern. In general, principal competitors of U.S. businesses in Pakistan are European, Japanese, and South Korean firms. Financing of goods and services is sometime crucial for importers in Pakistan, and these countries often offer credit terms which could make it difficult for U.S. suppliers to compete. Also, Pakistanis sometimes note that U.S. goods are a bit pricey relative to those of some competitors, and that U.S. firms generally do not move as quickly as some competitors to meet demand. Pakistan is a diverse and challenging market, requiring adaptability and persistence. Careful planning and patience are the prerequisites for success in this emerging market. U.S. firms that are willing to invest time to develop market presence should expect to be rewarded in the long-term.[end of document]Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title 17, United States Code.