Pakistan Ranks in the Middle For Logistics and Trade

The World Bank’s (WB) Logistics Performance Index (LPI) ranks Pakistan at number 72 for 2014, out of 160 countries.

LPI  is ranking is based the efficiency of customs, border management and clearance as well as the quality of trade and transportation infrastructure. It also comprehends the quality of logistics services, the ability to track and trace consignments and the frequency at which shipments correctly reach their destinations on schedule.

The first LPI survey conducted in 2007 ranked Pakistan at number 68, which fell to a low of 110 in 2010 before recovering to 71st position in 2012.

Logistics performance is an important indicator of a nation's level of development and its ability to participate in global trade.

Another similarly important indicator is the ranking of a country on OECD survey of economic complexity compiled by Massachusetts Institute of Technology.  This indicator comprehends the diversity of products ad services traded and the number of trading partners. The more diverse the trade and trading partners, the higher the rank. Pakistan ranks 91 on this index among 144 countries as of 2012. It ranks higher than single-commodity oil exporting nations  like Iran and Saudi Arabia but lower than the newly industrialized Asian nations.

While Pakistan has made some progress on logistics and trade, it still has a long way to go to improve the lives of its citizens through infrastructure improvements and diversification of its products and services trade. Timely execution of Pak-China industrial corridor plans will hopefully help Pakistan make progress on this front.

Related Links:

Haq's Musings

Pak-China Industrial Corridor

India-Pakistan Economic Comparison 2014

Pakistan's Infrastructure

Challenging Haqqani's Op Ed: "Pakistan's Elusive Quest For Parity"

State Bank Says Pakistan's Official GDP Under-estimated

Pakistan's Growing Middle Class

Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued

Fast Moving Consumer Goods Sector in Pakistan

3G-4G Roll-out in Pakistan

Mobile Money Revolution in Pakistan


Riaz Haq said…
The National Highway Authority (NHA) on Friday told the Senate Standing Committee on Foreign Affairs that for the early operationalisation of Gwadar Port, the existing route of China-Pakistan Economic Corridor (CPEC) project is being upgraded and it will not be changed. Briefing the committee, Chairman NHA Shahid Ashraf Tarar said that the work has been started on the existing infrastructure for the CPEC project, adding that the plan consists of both long-term and short-term projects.

He told the committee that the decision to use the existing infrastructure has been taken following consultation with the Chinese authorities and the original route was not possible due to lack of funds. Senator Haji Adeel, who chaired the meeting, expressed resentment and stated that the project should be completed according to the original plan so as to create opportunities for the less developed parts of the country.

He also shared a map of the route of the project, saying that the original route has been changed due to which less developed areas could be deprived. Later, talking to media persons, Haji Adeel reiterated that work should be started on the original plan of the CPEC project to prevent deprivation of the small provinces and the less developed areas.

In its previous meeting, the NHA chairman told the committee the original route needs $12 billion, which is not possible due to the non-availability of the required funds. He said that existing infrastructure will be upgraded, as the government plans to operationalize Gwadar Port in May this year. He said that at this stage the original plan of the CPEC from Khunjerab to Gwadar via Mianwali, D I Khan, D G Khan, Khuzdar and Turbat is not possible and Chinese authorities have also asked Pakistan to use the existing network of the motorways.
Riaz Haq said…
Pakistan and China vowed to expedite work on the China-Pakistan Economic Corridor during a meeting between Pakistani Prime Minister Nawaz Sharif and visiting Chinese Foreign Minister Wang Yi here on Friday.

China has been a trustworthy friend of Pakistan, and friendship with China is the cornerstone of Pakistan's foreign policy, said Sharif.

Pakistan is looking forward to welcoming a state visit by Chinese President Xi Jinping at an early date in 2015, the Pakistan-China Year of Friendly Exchanges, the prime minister said, adding that his government believes the visit will bring the strategic cooperative partnership between the two countries to a new level.

He said Pakistan attaches great importance to the Pakistan- China Economic Corridor and is willing to work vigorously with China to build the corridor and get early harvest.

For his part, the Chinese foreign minister extended great appreciation to Sharif for his unremitting efforts to promote China-Pakistan ties.

China and Pakistan are "iron brothers," he said, adding the iron brotherhood between the two countries "will never go rusty."

The upcoming visit by President Xi to Pakistan this year will provide a powerful impetus to the development of bilateral relations, said Wang.

He said the two countries should push forward both economic cooperation and security cooperation at the same time. China and Pakistan should boost economic cooperation in key fields such as the China-Pakistan Economic Corridor, port, energy, transportation infrastructure and industries while jointly combating terrorism to maintain peace and stability of the region, said Wang.
Riaz Haq said…
#China's largest embassy opens in #Islamabad symbolizing close #Pakistan-China ties …

An opening ceremony of the new Chinese embassy in Pakistan was held on Feb 13. As China's largest overseas embassy, it is a symbol of friendship between China and Pakistan, Foreign Minister Wang Yi said on Friday in Pakistan, where he spoke of the two countries' 'all-weather' friendship, Global Times reported.

Chinese Foreign Minister Wang Yi's two-day visit to Pakistan is seen as a preparation for the upcoming visit of Chinese President Xi Jinping, according to reports.

"Wang Yi said President Xi Jinping will make a state visit to Pakistan at the earliest possible date this year," a statement posted on the Foreign Ministry's website late on Thursday said.

"This will be President Xi's first visit to Pakistan as head of state," Wang said.

Xi was scheduled to go to Pakistan last September, but the trip was postponed due to domestic situation in Pakistan.

Since taking office in 2013, Xi has pushed the idea of a Silk Road Economic Belt that would connect China to South Asia and Central Asia with roads, railways, ports and airports.

Last year, Xi visited India, Sri Lanka and the Maldives.
Riaz Haq said…
To finance infrastructure projects connecting South Asia, Southeast Asia, Central Asia and Europe along an integrated land corridor

China has taken a firm step to implement its vision of the Silk Road Economic Belt — an initiative to integrate the economies of Asia and Europe along the Eurasian corridor — by putting into operation its $40 billion infrastructure fund for this purpose.

The fund, flagged in November last by Chinese President Xi Jinping, has started functioning on the lines of Private Equity (PE) venture. With China as the fulcrum, it is meant to finance development of roads, rail tracks, fibre optic highways, and much more, that would connect South Asia, Southeast Asia, Central Asia and Europe along an integrated land corridor.

Funds can also be allocated for the Maritime Silk Road (MSR), which envisions development of ports and facilities, mainly in the Indian Ocean. These ports will be connected to the hinterland by a string of land arteries, which will eventually hook up with the main Silk Road Economic Belt at specific junctions.

Xinhua quoted President Xi as saying during the November meeting with officials from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan that the purpose of the fund is to “break the connectivity bottleneck” in Asia.

The Chinese President had offered investors from Asia and beyond to join the Silk Road fund for the development of specific projects.

The $40 billion fund was in addition to the decision to establish a $50 billion Asian Infrastructure Investment Bank, which is also meant to help finance construction in the region.

On Monday, the semi-official China Business News quoted Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), as saying the $40 billion fund “has already started operations, with registration on December 29 and the first board meeting on January 6”.

China has poured part of its foreign exchange reserves in the fund, which include investors such as the China Investment Corp, the country's sovereign fund, and China Exim-Bank.

Analysts point out that as its economy slows down from its earlier blistering pace, China has developed large overcapacity in construction material, including cement and steel. China’s “One Road, One Belt” strategy, aimed at establishing new “growth engines” along the Eurasian corridor, could well absorb some of this surplus.

In an editorial in China Daily, Justin Yifu Lin, former chief economist of the World Bank, wrote: “The strategy is good for the stabilisation and development of the world economy and China, as it has a large overcapacity in construction materials.”
Riaz Haq said…
KARACHI: As the country continues to take steps in an attempt to tackle the persistent energy crisis, Commerce Minister Khurram Dastgir Khan on Wednesday said the government intends to approve 10,400-MW projects that fall under the Pak-China Economic Corridor by March.
He said this while talking to media during his visit to the head office of Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
“Prime Minister Nawaz Sharif has decided to expedite the work on energy projects to overcome the energy crisis,” he said, while declaring 2017 as the year in which the nation will see huge changes on both fronts — terrorism and energy crisis.

The commerce minister’s visit to FPCCI was part of the events scheduled to take place on the inauguration of the Expo Pakistan 2015 – the biggest annual trade fair of the country.
The event will be held at the Karachi Expo Centre from February 26 to March 1.
“I am here to take the business community in confidence so that they can plan their investments well before 2017,” said Dastgir, “Because with the help of recent steps to overcome terrorism and energy issues, Pakistan’s economy will get a massive boost in 2017.”
The Expo Pakistan 2015 has given the government confidence to display a strong image of Pakistan through its exportable goods, he said, adding that it has also planned a single country exhibition this summer in the United Kingdom to get business orders for our industries.
Replying to a question, Dastgir said that he was not promising to end load-shedding in 2017. “What I am saying is that Pakistan will be able to considerably resolve its energy crisis,” he added.
He said that his visit to FPCCI is also linked with the government’s efforts to start collecting budget proposals for the upcoming federal budget.
Speaking on a specific question on slow tax reforms in the country, he said that Pakistan definitely needs innovative solutions to overcome its problem of low tax-to-GDP ratio.
The minister also faced tough questions on why the government was not taking all provinces on board on the Pak-China economic corridor.
Riaz Haq said…
The country expects to received an overall business of $1.3 billion from the four-day Expo Pakistan 2015 that concluded on Sunday, according to a Trade Development Authority of Pakistan (TDAP) release.
A large number of serious buyers have established contact with major exporters in Karachi, Lahore, Sialkot and Faisalabad. The buyers are either negotiating new orders or have increased the volume of existing orders after visiting factories in different cities.
The estimated value of such business negotiations is estimated at $500 million, based on the feedback received from Pakistani companies and foreign buyers themselves.

The gems and jewellery sector was able to get orders worth $20 million, while a large number of serious buyers are visiting factory premises in Lahore, Sialkot and Faisalabad for further negotiations.
A Russian buyer has contacted Forward Sports and to discuss the prospects of supplying footballs for the next football world cup in Russia. A Bangladeshi firm has also signed a Memorandum of Understanding (MoU) worth $2 million with Sialkot based firm, Malik Sports.
Japanese companies have shown an interest to invest $25 million in pharmaceuticals, organic food items and sports goods.
Over 571 leading exporters of Pakistan had setup stalls in the exhibition which was attended by more than 750 foreign buyers and importers from 77 countries, said TDAP officials.
A Dubai based company has finalised a deal with a Pakistani slaughterhouse to import meat worth AED 15 million per annum. Similarly, an Abu Dhabi based company has also struck a deal with a Pakistani slaughterhouse to import meat worth $10 million annually.
Another Dubai based supplier to the UAE government has given a contract order to purchase uniforms and office accessories worth $1 million.
A Dubai based special purpose theme based facilities is investing $4 billion in Dubai over the next three years. For this purpose, it has indicated to bring a large delegation to conclude an MoU for the supply of materials and manpower worth $1 billion over the next three years.
Prime Minister Nawaz Sharif inaugurated the Expo Pakistan 2015 on February 26 and also conferred awards to top exporters.
The Federal Commerce Minister and top TDAP officials met with almost 33 country delegations led mostly by presidents of foreign trade chambers or associations consisting of foreign buyers.
Riaz Haq said…
Wikileaks confirms fears of activists against #US trade in services agreement (#TISA) with countries incl. #pakistan

WikiLeaks released 17 secret documents from the Trade In Service Agreement (TISA) negotiations on June 3. The documents have confirmed the fears of campaigners around the world that TISA is designed to benefit corporations at the expense of workers and the general public.

TISA is being negotiated between the US, European Union, Australia, Canada, Chile, Hong Kong, Iceland, Israel, Japan, South Korea, Liechtenstein, New Zealand, Norway, Switzerland, Taiwan, Uruguay, Colombia, Costa Rica, Mexico, Panama, Peru, Turkey, Pakistan and Paraguay. These countries make up about two-thirds of global GDP.

The secretive talks began in 2012 when a group of countries — giving themselves the Orwellian name of “Really Good Friends of Services” — became unhappy with negotiations in the World Trade Organisation, in which poorer countries were demanding more equality and a focus on development and public interest.

Corporate wish list

Our World Is Not For Sale (OWINFS) said on June 3: “The TISA is exposed as a developed countries’ corporate wish lists for services which seeks to bypass resistance from the global South to this agenda inside the WTO, and to secure an agreement on services without confronting the continued inequities on agriculture, intellectual property, cotton subsidies, and many other issues.”

TISA aims to liberalise services industries, including transport, telecommunications and finances. Services make up a large part of the economies of the negotiating countries, even the poorer ones — nearly 80% in the US and EU and 53% in Pakistan.

This leak follows WikiLeaks' release of the TISA Financial Services Annex in June last year, and the December leak of cross-border data flows, technology transfer, and net neutrality documents.

The cover page of the financial services document highlighted the extraordinary lengths that the parties would take to ensure secrecy. It said it should only be declassified “five years from entry into force of the TISA agreement or, if no agreement enters into force, five years from the close of the negotiations”.

Only Switzerland has been publishing its contributions to the negotiations.

This would leave the public unaware of the provisions in the agreement even as they were being implemented.

Nick Dearden, director of Global Justice Now, said on June 4: “It’s a dark day for democracy when we are dependent on leaks like this for the general public to be informed of the radical restructuring of regulatory frameworks that our governments are proposing.”

Deborah James of OWINFS said: “The secrecy charade has collapsed. TISA members trying to keep their publics in the dark as to the negative implications of the corporate TISA for financial stability, public safety, and elected officials’ democratic regulatory jurisdiction have been exposed to the light of day, in the largest leak of secret trade negotiations texts in history.”

International Trade Union Confederation (ITUC) general secretary Sharan Burrow said on June 5: “Trade deals being done behind closed doors are setting up working people to lose out and aiming to concentrate yet more power and wealth in the hands of multinational corporations, at the expense of the common good.

“With big majorities of people in ITUC Global Poll results showing deep concern over the influence of major corporations, governments need to turn their attention to building a trading system that works for the common good.”
Riaz Haq said…
One very disturbing aspect of TISA is the document uncovered by WikiLeaks revealing an entire section on immigration, referred to as “Movement of Natural Persons.” This section discusses commitments by the parties not to place undue burdens on visas and singles out face-to-face interviews as an example of “overly burdensome procedures.” [see the footnote on page 7] At a time when we face so many national security problems, why would conservatives trust this president to squelch any visa provision threatening our security?
And guess who is a party to TISA?
Pakistan! In addition to the massive immigration from Pakistan, we admitted 78,000 Pakistani nationals on some type of visa in 2013. Do we really want to join in an agreement that could loosen restrictions on visas from Pakistan?
Guess which other country is a part of TISA? Mexico! For good measure, Turkey is also a party to TISA. What could go wrong?
There is a lot of hype being thrown around about some of these treaties, but the WikiLeaks document on TISA is very believable because service industries, the tourism industry in particular – hate all restrictions on visas. Their opposition is certainly understandable, but that is the price we must pay when scrutinizing visas from volatile and dangerous parts of the world.
- See more at:
Riaz Haq said…
Although facing institutional and capacity constraints as in many developing countries, Pakistan has been actively involved in the GATS negotiations by pursuing a strategy of “critical engagement” recognising the positive role that services liberalisation can play by improving the competitiveness of the goods sector and other services, as well as increasing export opportunities and improving the efficiency of domestic services. Pakistan has received several requests from its trading partners and has also tabled some. In order for Pakistan to strengthen both the multilateral and bilateral negotiating process for services, the study suggests the formalisation of a “bottom-up” consultation mechanism incorporating national stakeholders.

The present study, produced in collaboration with the Lahore University of Management Sciences, identifies construction and related engineering services, architecture, engineering and integrated engineering services, energy services and environmental services as priority sectors, and the temporary movement of natural persons (Mode 4) as a priority mode of supply for Pakistan. The construction sector, which represents a fundamental activity in Pakistan with strong forward and backward linkages, is seen to have potential import and export interest. Further liberalisation in the environmental services sector, including waste collection and recycling, would also benefit Pakistan. However, removal of existing restrictions on Mode 4 is seen to be of the greatest potential interest to Pakistan. This study comes at an opportune time for Pakistan in implementing concerted measures for macroeconomic stabilisation and structural reforms as its economy advances towards a higher degree of openness and export orientation. In this context, it provides a timely backstopping analysis for the definition of its negotiating interests in bilateral, regional and multilateral negotiations.
Riaz Haq said…
Pakistan Logistics Industry to 2020 - $30.77 Billion Outlook and Growth Opportunities - Research and Markets

Pakistan Vision 2025 seeks to enhance the national transportation infrastructure by establishing an efficient and integrated transportation and logistics system. Establishing industrial parks and developing SEZs along the China-Pakistan Economic Corridor (CPEC) will strengthen the transportation network and logistics infrastructure. Road freight transportation contributed over 90% of the goods transported by land.

Rail freight is likely to gain share due to modernization and expansion. High priority is given to road network development. Private sector participation in logistics infrastructure development is likely to gain momentum, and transportation and warehousing are likely to lead logistics industry growth during 2016-2020.

The potential opportunities in the logistics industry in Pakistan, is estimated at approximately US $ 30.77 billion in 2015. Key targets set in the national development initiatives for the transportation sector include reduction in transportation costs, effective connectivity between rural areas and urban centres, inter-provincial high-speed connectivity. Also high priority is given for the development of integrated road/rail networks between economic hubs (including air, sea and dry ports) and high capacity transportation corridors connecting with major regional trading partners.

Up-gradation of all major airports to trans-shipment hubs, development of cargo villages, modernization of rail transport, E-commerce, CPEC related investments in industrial centres and Special Economic Zones (SEZs) will serve as primary macro drivers for logistics sector growth. CPEC related projects intend to upgrade and modernize road transport and related logistics infrastructure such as logistics park and establishment of cargo villages at major airports. Hence, high priority is given for road network development; private sector participation in logistics infrastructure development is likely to gain momentum.

Storage and Warehousing demand from CPEC related industrial corridors are likely to derive increased storage and warehousing requirements including cold chain logistics, establishment of Cargo Villages Ports will facilitate goods traffic to central Asian countries and evolve as a major transhipment hub in the region.
Riaz Haq said…
Pakistan has 116 diplomatic missions in other countries. This figure includes 85 embassies, 29 consulates and 2 permanent missions.

Pakistan ranks 27 in the world and 7th in Asia on Lowery diplomacy index.

India has 181 missions including 124 embassies and 48 consulates. 

India ranks 12th in the world and 3rd in Asia on Lowery Diplomacy Index.

United States is number 1 and China is number 2 on diplomacy index.

US has 273 diplomatic missions while China has 268. 

France ranks 3rd, Russia 4th and Japan 5th in the world.

Riaz Haq said…
Alibaba moves to attract Pakistani exporters towards B2B portal

Chinese ecommerce giant Alibaba Group geared up efforts to get Pakistan’s exporters listed on its multination business-to-business electronic portal, the company’s senior executive said on Monday, after the firm expressed its intention to acquire a Norwegian telco’s financial subsidiary in the country.'s Country Manager Jason Jia said the group has launched Pakistan pavilion on the website to showcase indigenous product listings following the Trade Development Authority of Pakistan and Alibaba Group signed a pact to improve the country’s ecommerce and boost exporters’ business last year.

“We want to work together to introduce Pakistani products to the world markets,” Jia said, addressing a roadshow for Karachi-based businessmen who constitute a negligible portion of the platform’s registered suppliers.

Currently, there are 3,000 paid members and most of them are based in Sialkot, Lahore and Faisalabad, while textile, leather, surgical instruments and sports goods sectors are the top categories. Even before the launch of Pakistan’s page, Alibaba has been attracting local buyers and suppliers. Overall, it has around 250,000 registered members from Pakistan. The site charges up to $1,500 annually from featured suppliers. Alibaba also signed up five local partners, including NJ Dynamic Solutions, EB Excels, NextBridge, Alpharex International and Trademor to provide sales and service support to member companies.

“We are looking for more from Karachi, especially apparel and garments sector,” Jia said, referring to more than three million small and medium businesses in the country.

Multilingual is the world’s leading business-to-business portal operating in 190 countries. It has two million online shops and 260 million plus buyers from across the world.

Mohammad Zia, a rock salt trader posed trust on the site’s capacity to generate orders for his start-up. “I have generated a good number of orders,” Zia said, declining to share the numbers, but added that his company grew to 10-worker payrolls from four in the past two years.

Zia said payment from foreign buyers gives him jittery and “so, if Alipay comes in there will be a much relief”. “Currently, we receive payment from banking channels, and Alibaba’s involvement in payment too will make all the things integrated,” he added.

Ant Financial Services Group, an affiliate of Chinese e-commerce giant Alibaba, agreed to acquire 45 percent stake worth around Rs20 billion in a subsidiary of Norwegian Telenor to broaden access to financial services through digital payment solutions in Pakistan. Completion of the transaction is subject to customary regulatory approvals. Ant’s technology Alipay, the world’s largest digital payment platform, would bring mobile payment and inclusive financial services to individuals as well as small and micro businesses in Pakistan where 90 percent of online orders of around Rs10 billion are fulfilled using cash-on-delivery.
Riaz Haq said…
#Pakistani #Startup Oware Raises $3.3 Million To Address Pakistan’s $35 Billion #Logistics Market. #US investors include Flexport Fund, Ratio Ventures, Seedstars International Ventures, Osiris Group, Swiss Founders Fund, Reflect Ventures, others.

"To get to its end destination, a product has to move between several warehouses, fulfilment centres and trucks,” adds Nisar. “This complex ballet is managed by multiple businesses without interconnected systems. Our vision is to build a large scale connected world of distribution that enables a faster route to market for our customers.”


Fixing Pakistan’s outdated logistics infrastructure will help the country's businesses grow and expand the economy, says start-up Oware, which is today announcing a $3.3 million seed financing round. The company, founded last June, promises to help businesses increase sales through more flexible warehousing and smarter distribution.

Oware founders Raza Kazmi and Adil Nisar argue that businesses across Pakistan are being held back by antiquated logistics systems. They struggle to secure new warehousing capacity to store inventory, the founders say, find it difficult to monitor their inventories, and face complex distribution problems.

“Our solution to that problem is based on a shared infrastructure that enables businesses to build sales without substantially increasing their costs,” explains Nisar. “The aim is to level the playing field for Pakistani businesses, because it’s currently only the large multinationals that have access to modern systems.”

In that context, Oware’s solutions are essentially three-fold. First, the business has opened 15 warehouses across four cities offering 500,000 square foot of space to rent; businesses can simply sign up to lease the space they need in any of these facilities, rather than having to find warehousing for themselves.

In addition, Oware offers a distribution service, moving businesses' goods from the warehouse to customers such as retailers and fulfilment centres, in line with their orders. This business-to-business distribution is crucial in a country were competition for last-mile delivery to the consumer has improved performance in recent times, but where previous stages of distribution have been ignored.

The final piece in the jigsaw is modernised logistics technology. Oware is building out dashboards that connect to all the moving parts of supply and distribution so that customers have far greater visibility of their stock levels and operations. The technology can also help reduce costs – for example, by analysing the trade-off between warehousing costs and delivery prices to identify where best to store inventory.

"Local businesses remain trapped in an archaic and opaque environment dealing with antiquated supply chain systems that are no longer fit for purpose and remain slow, limited, and capital intensive," says Kazmi. "The time to set up operations is too long, there is limited visibility or tracking of orders, and the execution of processes is inefficient in terms of speed and cost, which we are on a mission to solve".

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