Undoubtedly, there are vast opportunities for strengthening business and trade relations between Pakistan and Malaysia. The two countries have agreed to enhance bilateral cooperation in various sectors, including trade, investment, defense, agriculture, and others. Several Memoranda of Understanding (MoUs) have also been signed. Among South Asian countries, Pakistan is Malaysia’s third-largest trading partner.
There are indeed vast potentials for the promotion of business and trade ties between Pakistan and Malaysia. Pakistan can achieve sustainable economic development by investing in its workforce, similar to Malaysia. In this regard, Malaysia can provide significant assistance to Pakistan, while Malaysian industrialists can also make safe investments in Pakistan. Conversely, there are ample opportunities for Pakistani investment in Malaysia, and through investment in that country, access can be gained to the extensive market of the 15 nations in the ASEAN bloc.
Malaysia is rapidly moving towards a high-income economy, and its benefits are reaching the Malaysian people. The Malaysian government has made substantial investments in its workforce, which is helping achieve sustainable economic development goals. Approximately 39% of the world’s population is associated with this economic bloc, which Pakistani investors and exporters should also benefit from. In fact, the rate of foreign investment in any country reflects that nation’s positive image and the strength of its diplomatic relations.
It is not difficult to assess the strength of diplomatic relations by observing the rate of foreign investment in our country. Pakistan’s goal was to attract foreign investment and create a conducive environment for doing business, and achieving this is promising for the public. The establishment of the Special Investment Facilitation Council (SIFC) and the introduction of the Pakistan Investment Policy have proven to be significant milestones in Pakistan’s journey toward economic development. These initiatives have gained widespread acceptance and recognition across the country.
The implementation of these steps and policies was, in fact, a response to the urgent need for economic revival. The primary objective was to address the challenges and difficulties caused by bureaucracy and legal complexities, which were directly obstructing foreign investment. The aim of these economic policies was to promote interprovincial cooperation and create investment opportunities in sectors such as agriculture and information technology. The total trade between Malaysia and Pakistan amounted to USD 1.4 billion, which included palm oil, apparel, textiles, chemicals and chemical-based products, and electric and electronic goods.
In addition to trade and investment, further avenues for cooperation will be explored in the fields of defense, tourism, agriculture, green energy, skilled labor, and youth empowerment. Pakistan needs more jobs to increase its production capacity. These jobs can only be created by mechanizing agriculture and reviving the industrial base. Economic recovery is only possible if we encourage the mobilization of local capital, reduce the size of the informal economy, increase the formal economy by lowering tax rates, and most importantly, create a fair business environment. Pakistan needs more investment to enhance its production capacity.
Pakistan needs a well-thought-out industrial policy that enables our products to compete globally in exports. An industrial policy would be a long-term plan to continually upgrade production and boost exports. For an economy that currently produces low-tech products, the growth of industries must be gradual. Currently, Pakistan lacks the trained workforce (capital) needed to produce complex equipment, nor is the government providing support through research and development (R&D) and training.
At specific points, firms also need preferential credit or investment in logistics. The aforementioned issues should be part of a national industrial policy. The promotion of industries does not happen overnight; it is the result of a step-by-step process. The current weakness of the economy has created uncertainty. Changes in laws, such as import controls or increased import taxes, have caused unrest in industries. Companies are also concerned about their ability to adapt new technologies to local conditions. Government support is essential for the promotion of industries.
It is equally important and necessary to attract industries to prepare facilities for tourism, call centers, and services like translation and interpretation. If national decision-makers provide industries with immediate financial incentives and tax breaks, it may not benefit the economy much, but investing in workforce training and encouraging industries toward research and development could yield long-term results. For economic success, it is essential to make better use of the population’s capabilities.
In urban areas, we should establish new-age industries, such as back-office processing, engineering services, freelancing, and fintech. With support for skills development, financing, and infrastructure, these companies can grow rapidly. The government must also understand the process of globalization and its effects. Relying on skilled labor and technology-based exports is no longer sufficient to become an Asian Tiger. Looking globally, emerging economies are moving toward high-skilled manufacturing, and this should also be Pakistan’s goal.
Pakistan should also secure grants for large-scale vocational training and online training support for specific industrial sectors. This could benefit technical staff. Increased foreign investment is not possible until foreign investors are offered profitable businesses or are involved in projects already running profitably so that their trust in our system can be restored. Investments worth billions of dollars can play a vital role in improving the national economy, but this is only possible if done in one go. Particularly in the IT sector, if major deals are struck, it could bring immediate benefits to the Pakistani public.
People are becoming accustomed to tough decisions and seem to do nothing but compromise on their standard of living and lament the situation. Public perception is strengthening that as long as Pakistan remains in the IMF program, inflation will rise, and purchasing power will decline. Economic relations with Middle Eastern and Gulf states are crucial to boosting Pakistan’s economy. Their importance increases even more given that Pakistan’s trade relations with India have been suspended since August 2019, and economic discussions with Afghanistan often face challenges due to the Taliban government in Kabul.
Another discouraging factor is terrorism, particularly attacks on Chinese workers. This situation discourages foreign investors from starting major projects in Pakistan. If the government wants to attract foreign investment, these issues must be addressed. This improvement and recovery is a clear testament to Pakistan’s capabilities, determination, and democratic spirit. The country is moving forward confidently due to the combined efforts of political leadership and state institutions. The future of our beloved country is bright and hopeful, offering development, prosperity, and stability to its people.
From a deteriorating state to now, Pakistan has demonstrated exceptional performance on both economic recovery and diplomatic fronts. Despite global challenges, every achievement and goal accomplished this year, from bilateral investment agreements to the launch of visionary economic recovery plans and policies, reflects Pakistan’s unwavering determination and courage to secure a bright and sustainable future for its people and the world at large.