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Exploring the avenues.

Mian Habibullah, President FPCCI led a delegation to Uzbekistan and Russian federation recently: He has exclusively reported the following experiences and objectives of the visit.

The Federation of Pakistan Chambers of Commerce and Industry sponsored the visit in response to the challenge thrown by the Prime Minister to the private sector of Pakistan to open up this vast and hitherto untapped territory and exploit it effectively in the wake of the latest political developments there. It was thus an exploratory visit, a visit which was destined to break decades of ice standing between these countries and ours. We were conscious that it was extremely difficult for an individual businessman to make any appreciable headway if he undertakes this visit on his own. It was only through the combined efforts and collective wisdom of a sizeable delegation representing a multiplicity of interests that some headway could be expected to be made.

The objective of the delegation was therefore, to explore the avenues of initiating and expanding trade, business and industrial relations with Uzbekistan and Russian Federation to find out the procedures required and legal framework governing such activities and to establish preliminary contacts with the prospective business partners there, which could blossom into concrete trade and industrial ventures through follow-up visits.

The visit was historic - both in the terms of the size of the delegation and the variety of interests being represented by its members. It consisted of over 80 leaders of business, trade and industry, representing such varied interests as commodities, confectionary, edibles, fabrics, garments, towels, made-ups, leather and leather goods, hardware fittings and thermos-flasks etc. It also included representatives of some multinationals operating in Pakistan engaged in the production of sewing machines and electrical and electronic goods etc. In addition, it also included journalists and representatives of TV for a prompt coverage of the delegation's activities during its tour.

It was obvious that the sheer size of the delegation merited special logistic arrangements for its movements. The FPCCI accordingly, chartered a special plane for its journey so as to remain independent of the timings of the regular flights, and arrange its movement according to the requirements suited to the delegation members individually and collectively and to be able to implement the plan of the visits/discussions as a whole in a better way.

This historic visit started with Tashkent, capital city of Uzbekistan, with which we are bound by centuries old ties of history, culture and religion, and which seemed to offer substantial potential for establishing mutually beneficial trade and industrial relations.

Despite the late arrival of the plane, the delegation was warmly received at the Tashkent Airport by high officials of various ministries, including the Ministries of trade and foreign affairs.

During our stay in Tashkent, it was gratifying to note that our Ambassador in Uzbekistan, H.E. Mr. Shafqat Ali Sheikh, had painstakingly arranged a comprehensive program of visits and discussions of the delegation. He also made it a point to grace each important meeting with his own presence and lend his valuable support to the delegation through his opening remarks and introductory speeches on each occasion.

On the first day in Tashkent, the delegation visited the permanent exhibition of Uzbek natural endowments and industrial production, where the major varieties of cotton, rice and other agricultural commodities, ferrous and nonferrous minerals, including the raw materials required for nuclear reactors as well as machinery and other industrial products being produced by Uzbekistan were comprehensively and artistically displayed - and were duly explained by professional interpreters. The relatively brief visit afforded an over-view of the entire spectrum of the country's vast potential in the fields of business, agriculture and industry. Through this display the delegation came to know that the Uzbekistan's long staple cotton fulfilled the need of the erstwhile USSR to the extent of 70%, its raw silk to the extent of 50% and its rice to the extent of 17%, besides significant range of fruits which found their way in the entire USSR. It brought to light the information that Uzbekistan has potential to produce upto 70 tons of gold per year and also revealed that Uzbekistan was producing spinning machinery and other items of textile machinery, selected electrical machinery, plastic mouldings, decorative furniture etc. In short, in the brief time at our disposal, it was helpful for the delegation in forming a general idea about the items which could be traded and or for which joint ventures could be established with Uzbekistan. It also brought into sharp focus the need to set up similar display of Pakistan products in Karachi, Lahore, Islamabad etc. to enable a similar overview to the visitors and prospective investors in the shortest possible time.

Monday, the 19th of October, 1992 proved to be the most productive day of stay in Uzbekistan. On that day, the mem2bers of the delegation, assisted by one decorator experienced in trade displays accompanying the delegation, arranged a tastefully decorated display of Pakistan products in Hotel Uzbekistan. There were about 40 stalls exhibiting a broad spectrum of articles of trade and industry such as fabrics, garments and other textile made-ups, confectionary, biscuits and other edibles, packaged rice, house-hold fittings, sports goods, cutlery, sewing machines and electrical and electronic items etc. A special desk was established to highlight the items of touristic attraction based on PTDC pamphlets and to disseminate information about the industrial potential of Pakistan, export and import procedures, joint venture opportunities etc. in Pakistan, duly supported by comprehensive documentation provided by the EPB. The display was visited by a number of Uzbeks, from trade, business and industrial fields who greatly admired the Pakistan products and established initial contacts with the members of the delegation.

On the same day, a full-fledged briefing especially on Uzbek potential in the industrial field and the promise it holds for the Pakistan investors, was held by the Uzbek Minister for Foreign Economic Relations Mr. Sadik Safaey. He explained the legal frame-work for foreign private investment and exhorted the delegation members to enter into joint ventures with Uzbek counterparts. In order to give on-the-spot replies to the specific queries by the Pakistan delegation, the Uzbek Government had arranged for the presence of a number of Deputy Ministers, and high officials of various ministries, who were assisted by professional interpreters, in their discussion with the individual groups of the delegation after the briefing.

An interesting feature of this briefing was that the Uzbek interpreter especially asked the Pakistan Ambassador, Mr. Shafqat Ali Sheikh and myself to deliver our addresses in Urdu and then translated them in Uzbek language. In fact many of other interpreters assisting the briefing also seemed to be fully conversant with Urdu.

In the same afternoon, I alongwith the Pakistan Ambassador and some delegates were invited by Mr. Bakhtiar Hamidov, Deputy Prime Minister who was again assisted by Mr. Sadik Safaey, the Minister for Foreign Trade Relations, to another meeting which discussed the entire policy framework of mutual cooperation between Uzbekistan and Pakistan.

Speaking warmly of Pak-Uzbek relations, Mr. Bakhtiar Hamidov invited the Pakistan delegates to study for themselves the achievements made by Uzbekistan in different areas of economy and passionately invited Pakistan entrepreneurs to join hands with Uzbek people in establishing joint ventures. He also emphasised the exchange of experts' delegations from both sides and offered Pakistan to learn from the Uzbek experience of turning erstwhile deserts into blooming fields through their irrigation system.

In this meeting, I proposed that in order to develop expeditious and effective trade relation between the two countries, the Federation would be pleased to offer an appr2opriate office accommodation to a trade representative from Uzbekistan in its own premises, and provide him the necessary telecommunication facilities like telephone, telex and fax. Mr. Hamidov greatly appreciated this gesture and offered to reciprocate it for a representative of FPCCI in Tashkent.

I also informed the Uzbek friends about the keen desire of the present government of Pakistan to help the Uzbek Republic in developing trade and industrial relations with Pakistan and the initiatives taken by the Pakistan government which are manifested especially in the reservation of a number of berths at the Karachi Port for goods destined to Uzbekistan and the plans to construct huge network of motorways and highways in Pakistan for providing easier land-communications with and through uzbekistan.

Finding the atmosphere as highly responsive, the Pakistan Ambassador requested the Deputy Prime Minister to approve the application made by the National Bank of Pakistan for opening of a branch in Tashkent. Mr. Hamidov responded that the President of the Republic had already accorded his approval to the proposal. This was an extremely happy augury for the visit of the delegation.

In this meeting one of the members of Pakistan delegation offered inter-alia, training opportunities in his own plant at the Karachi Export Processing Zone to Uzbek technicians and engineers - which may possibly be a fore-runner to the establishment of a joint venture with Uzbek entrepreneurs. Another delegate offered to establish a joint venture for leather processing and leather goods, Still another delegate spoke of floating a chain of international restaurants. All these offers were highly appreciated by the Uzbek side, which promised all possible help in their realization.

The Uzbek Deputy Prime Minister was so moved by the warmth of feelings expressed by Pakistan side that he promptly offered to sign a "Memorandum of Understanding" between the FPCCI and the Uzbek Republic incorporating all the points on which an understanding had been reached in these discussions. This draft is now under preparation in the FPCCI and will be sent to the Uzbek Government for their approval and ultimate signatures.

In this meeting, the Uzbek Minister also explained the laws governing protection of foreign private investments, ownership and joint ventures, and other laws pertaining to trade and commerce in the country.

On specific request by the Pakistan side, the Uzbekistan Deputy Prime Minister promised to send copies to compilation of Uzbek laws on protection of foreign investment and other Uzbek laws on Commerce and Industry, rendered in English language, to Pakistan for information of the business and industrial circles. A few copies of the compilation have since been received.

It was painful for the delegation to note that not a single one of 600 joint ventures established in Uzbekistan since their emancipation from USSR was of Pakistan origin. On the other had, the Indian entrepreneurs seem to have made some inroads into Uzbek economy and are investing inter-alia in Hotel and Restaurant Industry there. This throws a challenge to the Pakistani entrepreneurs not to let this market slip from their hands.

The visit to Uzbekistan will help in opening new avenues of trade and industry and revealed opportunities in entering into joint ventures with Uzbek nationals based on the respective resources of the two countries, such as joint ventures for production of value-added fabrics and garments based on Uzbek cotton and Pakistan's technology, silk produced out of silk cocoon imported from Uzbekistan. Similarly, the production of leather garments, qaraqul caps, tinning and packaging of Uzbek fruits, setting up of textile mills based on Uzbek machinery etc. all offer rich promises. Also pure trading with Pakistan based on confectionary items, biscuits, stationery articles, and other consumer goods seem to be viable business propositions. The Uzbek Ministers seemed to be specially interested in establishment of service industries like hotels, banks, insurance companies etc. which are areas suitable to be capitalized immediately by Pakistan.

In the evening of the 18th October, 1992 the Pakistan's Ambassador to Uzbekistan held a dinner, in which leading businessmen, industrials and government functionaries were also invited. Their presence provided a further opportunity to the Pakistan delegates in establishing business connections between the two countries. We were especially happy to meet the Governor of the State Bank of Pakistan and the Presidents of the National Bank of Pakistan and Muslim Commercial Bank, all of whom had arrived there just that day and who agreed to grace this occasion with their presence.

Our next stop was Moscow. From the very first moment of our landing, the stark difference between the respective performance of our Ambassadors to Uzbekistan and the Russian Federation became obvious. It became evident that our Embassy in Moscow had not done its home work properly, especially the Pakistan Commercial Counsellor's attitude remained highly indifferent. These impressions became deeper and deeper with the unfolding of successive events. The program outlined by the Pakistan Embassy included visits to three different official organizations by the three different groups of the delegates according to their fields of interest. Yet when these groups reached the respective destinations, it transpired that either the meetings with the high officials were not confirmed or they were despatched to wrong addresses which were at least five years old. Similarly, a meeting at a supposed "Export Exhibition of Russian Products" was arranged, which proved to be totally irrelevant. The delegation, however, tried to make the best of a bad situation and the group connected with the trading of grey cloth, fabrics and garments succeeded in having meeting with officials through their sheer perseverance and insistence.

The Embassy had planned for me to see the high officials in the Ministry of Foreign Economic Relations of Russia, the Lord Mayor of Moscow and the President of Russian Chambers of Commerce and Industry, Mr. Smirnov. I regret to point out that all the meetings largely proved fruitless. In the first meeting, the high officials indicated for the meeting were not available. In the second, the Lord Mayor was substituted by Deputy Mayor who did not seem to have fathomed the objectives of our visit. However Mr. Smirnov, who seemed to be in a hurry for another meeting, did explain some salient features about the Russian laws on trade, business and joint ventures. I intend taking up the issue of this obvious neglect of duties by the Ambassador and other officers of his Embassy at appropriate level.

As in Tashkent, another display of Pakistan goods was arranged in a hotel located centrally in Moscow and reserved for that purpose. Here also, the display consisted of Pakistan products like fabrics, garments and textile made-ups, towels, toilet articles, edibles, confectionary, thermos flasks, sewing machines etc. duly supplemented by literature of touristic and business interest from Pakistan. Here also a desk to disseminate information about touristic spots of Pakistan based on PTDC leaflets and about the export potential of Pakistan, based on the literature provided by the Export Promotion Bureau, attracted a number of visitors. On the whole, the display succeeded in attracting a satisfactory response and a number of preliminary contacts were reported to have been made. I was also interviewed by Radio Moscow on this occasion.

Despite the shortcomings encountered largely due to the neglect of the Pakistan Embassy in Moscow, the members of our delegation were able to extract useful information from the officials they met and establish some preliminary contacts with their prospective partners in trade - and joint ventures.

Conscious of coming from a country, which prides itself in upholding the Islamic values wherever it is represented, the delegation out of its extremely busy and highly crowded itinerary, was able to carve out a few hours for offering Juma Prayers at the central mosque of Moscow where it was heart-warming to see about two thousand of devotees including many young boys offering their prayers. Similarly, on our way from Tashkent to Moscow, we were able to spend a few hours in the centres of Islamic Culture of Central Asia, in Bukhara and Samarkand. We visited the tombs of great Islamic Scholars and offered Fateha. The visit to the tombs of Imam Bukhari was a real pilgrimage in the Islamic history. We paid our humble homage to this greatest scholar of Hadith, offered Fateha and prayed for the success of the mission and for the glory of Islam.

Having returned to Pakistan, we intend to continue working on the attainment of the objectives of the mission. A preliminary Report on the tour is being compiled, which will be despatched to each member of the delegation for inviting their suggestions, recommendations and briefings on their own discussion with the officials and businessmen of Uzbekistan and Russia. It is intended to compile a comprehensive Report on this historic mission on receipt of this and further information from Tashkent and Moscow.
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Title Annotation:visit to Uzbekistan and the Russia Federation by members of the Federation of Pakistan Chambers of Commerce and Industry
Author:Habibullah, Mian
Publication:Economic Review
Date:Nov 1, 1992
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