Swedish Ambassador to Pakistan Lars-Hjalmar Wide said on Tuesday that Pakistan suffered from an “image problem,” which made foreign companies hesitant in entering the domestic market.
Talking to the Karachi Chamber of Commerce and Industry (KCCI) office bearers in the presence of the media at the KCCI office, Wide said that Swedish companies like Tetra Pak, Millicom International Cellular, Saab Automobiles and GAC Logistics were operating successfully in Pakistan and their existence should encourage foreign companies to invest in the country. “Representatives of foreign companies should come to Pakistan and talk to their Pakistani counterparts. The situation is actually quite different here then perceived,” the ambassador said.
The value of Sweden’s exports to Pakistan was $440 million in 2010. Pakistan’s exports to Sweden were worth $120 million in the same year.
Wide stated that he was trying to bring a delegation of Swedish companies to Pakistan in October. “This delegation will be followed by a bigger delegation of 15 to 20 Swedish companies next year,” he said, adding that the focus of his attention was on bringing Sweden’s technology companies to the country, which could turn waste into energy.
Sweden’s exports to Pakistan are mainly in paper, telecommunication equipment, machinery, trucks, chemicals, metals and defence equipment sectors. Pakistan’s major exports to Sweden are textile, garments, leather and sports goods.
Although the ambassador sounded optimistic about a probable increase in the volume of investment by Swedish companies in Pakistan, official statistics show another picture. According to provisional data compiled by the State Bank of Pakistan (SBP), the net inflow of private investment in Pakistan from Sweden was $26.7 million during July 2011 and May 2012. However, foreign direct investment (FDI) from Sweden to Pakistan was negative over the same period, as the total outflows stood at $22.1 million.
The positive figure of net inflow is, therefore, due to Sweden’s portfolio investment of $48.8 million over the same period. A portfolio investment is a passive investment in securities, which does not entail active management or control of the securities’ issuer.
Similarly, workers’ remittances from Sweden have a negligible share in the total remittances Pakistan received last year. Out of Pakistan’s total incoming remittances of $12 billion in fiscal year 2012, inflows from Sweden were $10.35 million, representing a share of 0.085%, according to provisional data provided by the SBP. Sweden’s total migrant remittance outflow was $695 million in 2010, the most recent year for which data is available on the website of the World Trade Organization.
Published in The Express Tribune, July 4th, 2012.