PAKISTAN-PHILIPPINES bilateral relations date back to September 8 1949, when diplomatic relations were established between the two and Philippines Consulate was opened in Karachi.
In fact, even before the establishment the diplomatic relations, our bilateral cooperation had already begun. Hence, on July 16, 1949, the two countries signed an air-service agreement. Since, then our bilateral relations have flourished spanning diverse sectors.
Historically speaking, both the countries have undergone similar experiences and have passed through similar phases. Both gained independence by throwing off the yoke of colonialism. Likewise, both experienced long spell of martial law and succeeded in overthrowing the dictatorial rule and achieving a successful transition towards democratic rules. There exists commonality of views on various regional and international issues. The most common trait that bind the two peoples is the hospitality and warmth toward foreigners. All this has helped built a reservoir of good will between the two peoples and governments.
To cement friendly relations further the two countries, on January 3, 1951, jointly ratified a treaty of friendship in Washington, D.C. The treaty inter alia ensured “perpetual peace and everlasting unity between the two countries and their people.”
In 1954 both the countries joined the US, the UK, France, Australia, New Zealand and Thailand in setting up the Southeast Asia Treaty Organization (Seato). The treaty was signed on September 8, 1954, in Manila and became operative in February 1955. Seato signified a pledge by the signatories to provide mutual aid in case of armed attack or subversion. It provided the two countries significant assurances that they have friends on their side and brought the two countries closer.
Visits
There had been high level exchanges between the two countries since the beginning. These include:
• Visit by Prime Minister Husseyn Shaheed Suhrawardy in May 1957. The visit led to the elevation of the Philippines legation in Karachi to an embassy.
• Prime Minister Mohammad Khan Junejo in May 1988.
• Prime Minister Shaheed Mohtarma Benazir Bhutto on February 17 and 18 in 1995.
• President Musharraf visited Manila from April 18 to 20 in 2005.
From the Philippines President Diosdado Macapagal paid a visit to Pakistan in July 1962. Incidentally, he was accompanied by teenager daughter Gloria, who eventually became president of the Philippines in 2001. President Fidel V. Ramos visited Pakistan in 1997.
Apart from these there had been a number of visits at ministerial and working levels. The leaders of the two countries had also been meeting each other on the sidelines of meetings in international and regional forums.
Policy consultations
A policy consultation mechanism exists between the two countries. It provides an opportunity to review bilateral relations. Its Fourth round was held in Manila in January 2015. The two sides reviewed bilateral relations and expressed satisfaction at the continued growth of mutually beneficial cooperation in diverse fields, including trade, commerce and other spheres. Both sides reiterated their commitment to further intensify cooperation in the fields of culture, tourism, trade, education and science and technology, and promote people-to-people contacts. We also agreed on the need for greater interaction between the private sectors.
Agreements
So far, 22 agreements and memorandum of understanding have been finalized between the two countries and many more are in the pipeline. These include trade agreement, cultural exchange agreement, agreement on avoidance of double taxation, agreement on promotion and protection of investment, cooperation agreement between the two chambers, agreement to establish a joint economic commission, so on and so forth. In short, the two countries have signed almost all the agreements that can help establish a very strong and progressive cooperation between the two countries.
Multilateral cooperation
Both the countries have been cooperating on issues of international significance. Hence, they jointly tabled a resolution on “Promotion of interreligious and intercultural dialogue, understanding and cooperation for peace”, in the 70th Session of the United Nations General Assembly in its plenary meeting on December 3 2015, which was adopted by consensus. It was a joint initiative of Pakistan and the Philippines, the resolution was first introduced in 2005 as a response to the then prevailing theory of “Clash of Civilization.” Both the countries also support each other’s candidatures at the United Nation and other multilateral organizations on reciprocal basis. Philippines supports Pakistan’s bid for attaining dialogue partnership with Asean. Pakistan supports Philippines’s bid to acquire observer status in the OIC.
Commerce and trade relations
Bilateral trade between our two countries is close to $100 million. Of this, Pakistan’s export are $61.7 million and the Philippines’s exports are $33.6 million.
Major items of exports from Pakistan:
• Textiles, rice, pharmaceutical products, leather hides, fruits, sport goods and surgical instruments.
The items of exports from the Philippines:
• Automotive parts, paper products, food preparations, electronics and packaging materials.
This shows that our bilateral trade has a very narrow base, which needs to be broadened. Efforts to further enhance and diversify our bilateral trade have borne fruit and some palpable improvement have been registered in our bilateral trade.
In this regard some trade delegations from Pakistan visited Philippines during the last 2/3years and held useful discussions with the Philippine Chamber of Commerce and Industry and other private businessmen. These included a delegation of Pakistan Chamber of Commerce and Industries in August 2014, a 15-member Rice Exporters of Pakistan (REAP) trade Mission in April 2015. In addition a number of businessmen dealing in pharmaceuticals and fruits also visited Philippines during this period. An invitation has been extended to PCC&I to undertake a visit to Pakistan. Regular exchanges between the two sides will help enhance our bilateral trade.
The Embassy is also working on the initiative for opening of direct flights between Manila and Karachi to facilitate travel of tourists and businessmen between the two countries.
There is very minimal investment from two sides. Pakistan offers very lucrative terms for foreign investments in almost all the sectors. These include power and energy, agriculture, mining and gems, infrastructure, construction, information technology and Telecom, textiles and automotive, etc.
Foreign investors are allowed repatriation of 100 percent profit, capital and dividends. One hundred-percent foreign equity is allowed both in the manufacturing and nonmanufacturing sectors. Tax relief is extended to foreign investors.
There is a small but energetic Pakistan community resident in the Philippines, not exceeding 1,400. These include professionals, businessmen and students, etc. A considerable number of them are working in the Asian Development Bank. Likewise, there are about 3,000 Filipinos resident in Pakistan mostly working as domestic servants, professionals, nurses etc. in major cities of Pakistan. Both the communities act as a bridge between the two countries and are a contributing factor toward further strengthening our bilateral relations.
1 comment
The Solution to the Economic Ills of Pakistan- Exports
The export strategy of Pakistan,should be based on export of water,labour,earth, defense and LDC benefits.Any other model will fail,as competitive nations,with deep pockets,will offer financial, fiscal and asset subsidies,to offset any advantage, that Pakistan,has w.r.t labour cost and geography (besides excellent logistics,and regulatory structures)dindooohindoo
Setting up manufacturing capacities,to cater to the local Pakistani market and exporting the surplus,is not viable,as Pakistan does not have economies of scale (even to realise the geometric impact,of lower labour costs).Planning capacities on that model,leads to the DISASTER of the Indian NPAs,of 350-400 Billion USD,with exports dead,and the inability of Indians,to compete,with the PRC.
Export of Water – is export of animal proteins, exotic fruits and vegetables and agri to the GCC,EU and other parts of the world.Water from the skies or the earth,by rarefaction or condensation or precipitation,in the form of hail,rain or snow,is purely a function of geography, in a time span of a few decades.Over a period of 3-4000 years,some disasters can occur, like the disappearance of Saraswati (in Pakistan) or the diversion of rivers etc.
Thus,water captures the fertility and agro-ecoonomic opportunities and variety of Pakistani soil,and also,the geo-strategic location of Pakistan (w.r.t access to GCC,Ports,Cheapest Point of Purchase for UN/FAO/WHO procurements for Afghanistan etc.)
In Pakistan,Water is a Perpetual Resource,UNLIKE in India.In addition,many nations in the EU allow a COO certificate linked to a Geography,in that exporting nation, to give ADDITIONAL DUTY/SUBSIDY AND QUOTA BENEFITS. These are agriculture and agri-derivatives,like wine.Pakistan is the prime candidate, for the same,for exotic fruits etc., which have valuable and critical,downstream applications,in the EU.
Export of Earth – is export of minerals,which ALSO,includes industries like Cement (which is export of lime,limestone and coal).Once the Coal Fields of Pakistan,are tapped,then it would include sale of power,as the cheapest way to transport power,is at the speed of light,via a grid – especially,when the Grid is set up by other nations.
Pakistani Mineral Resources are almost perpetual, and in areas with very low density of population and ample water.Thus the scope for TOLERATING pollution is higher – and so,like in Nuke Power – if some latitude is granted w.r.t pollution, wastes, effluents, safety and environment – mining costs can crash exponentially.For a Perpetual reserve,with an exchange rate of Rs 160/USD,it is akin to burying US Dollars, 1000 meters in the earth,and starving on top of the earth.For a nation,with finite reserves (in the short term),there is an opportunity cost,of exports – in terms of the fact that,in 2023 (say),prices of several ores might be 2-5 times, current rates – and so,they can raise USD,from bankers,liening the mining reserves.
Export of Defense – In conjunction with the PRC and the PLA/PLN.PLAF,Pakistan can perfect the technique of customising and innovating Chinese Defense Technology,for their use,and exporting lower technologies or the excess capacities to Africa,Central Asia,LATAM,South America and the Middle East (excluding the quasi Nato nations). With Chines=se Financial Aid, extensive credits can be given.There are many nations in the world, which the PRC would NOT like to make defense exports to.
Export of Labour – Pakistan needs to be practical,to use low cost manufacturing technologies ,which are labour intensive and require moderate power consumption ,and some pollutive impact.Low Capital Costs,will lower the Operating and Financial Risk,and the skilled but CHEAPER labour cost,can be exported OUT.There would be several such technologies,several products and several markets.
LDC – Lastly,Pakistan has to maximise the LDC benefits,using Chinese Capital and SEZs – with an appropriate mix of Chinese Labour and Domestic Input Costs,in the SEZ units, so that the COO is Pakistan,and the LDC benefits are availed of.
SEZs – The SEZ policy of Pakistan has to be synthesised with the LDC gains,to ensure that the costs to the SEZ,are the lowest among all LDCs in the world.However,the Costs are not to be evaluated, as the Nominal Costs.So the land lease and other charges,payable by the SEZ to the Pakistani State, might not be the lowest – but on a NET differential Mode,w.r.t the Reduction in Logistics costs,to the Pakistani SEZ,it should be the LOWEST in the world. Once that is done,then as a thumb rule, to keep the laws simple, FREE EXIM needs to allowed and all Inputs (including Power etc.) should be sourcable,w/o caveats.So a SEZ should be able to set up a IPP/CPP/RPP, anywhere in Pakistan,with any fuel,with nil duty and taxes and the lowest wheeling and banking charges.
Corporate Tax holidays should start AT THE CHOICE of the Investor,FROM THE YEAR after which the Brought forward losses,of the SEZ are exhausted. And the Tax holiday should be co-terminus,with that of the longest holiday,by any LDC.The period of limitation,for the Choice of initiating the holiday period,should be upto 5 years,from commercial operations.
Basically,even if Pakistan waives the Wheeling charges etc.,it does not matter,as the aim is to bring in the ANCHOR and other Investors in the SEZ.Thereafter,the principles of Self Preservation by the SEZs,and its units,will ensure that,the State will find ingenious ways to earn revenue – provided that,1st the ANCHOR comes in,and then, that the SEZ and the SEZ units,make money !