Business Circle(trial)

 Information, Systems & Support
 Information, Systems & Support

Business
Circle

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Contents

Volume No. January 2018

1. Empirical & Analytical Examination of Pakistan- China

Free Trade Agreement

2. Pakistan „s relations with-
3. Precious bird of the poor region
4. Prospect for Pakistan‟s Gloves (Reports)
5. Pakistan status on SDGs
6.

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From the
President
Desk

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With the advent of 2018 the FPCCI has been re-tracked
with new spirit to showcase its endeavors to accomplish
its mission. I have planned to present each and every
activity by FPCCI in a befitting manner to raise image of
this apex body. The present issue of monthly bulletin
has been redesigned according to the equipment of the
FPCCI to acknowledge efforts made by FPCCI and in a
specific month and specific area.

Though this issue of Business Circle is the first one but
gives quite awareness of its future flights.
My efforts would be to create awareness, enhance
knowledge and give solutions to the trying issues of the
Pakistan’s economy as well as barriers to business
community.

In our maiden month we immediately after assuming our
offices have been engaged in re-organization of FPCCI
placing the suitable HR at a suitable place with the
improvement in service rules.

On the economic front first of all I took the important
matter with the relevant Government offices. I discussed

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various issues with Dr. Mifta Ismail, Mr. Haroon Akhtar,
Rana Afzal, from Ministry of Finance, Economic Affairs,
Privatization and statistics, for security purpose of our
businesses I met also with ISPR. On international front
we held a fruitful discussion with the ambassador of
China, Maldives, Serbia, Nepal, and UAE. Similarly, we
kept close liaison with our constituent’s member bodies
and met with KATI, NKATI, Automobile Association,
Real Estate Association, Custom Agent Association,
Employers Federation of Pakistan and Quetta Chamber.
I am glad to see motivation, energy and enthusiasm
among my office bearers and specially FPCCI secretariat.
I am optimistic that with their vibrant role this would
be great change in all activities of FPCCI.
I urge upon our members, academia and research
organizations to come forward and participate in this
knowledge sharing monthly bulletin.

GHAZANFAR BILOUR
PRESIDENT -FPCCI

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Empirical & Analytical Examination of
Pakistan- China Free Trade Agreement

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Following GATT Article XXIV which permits
bilateral trading arrangement, the member nations of
the WTO are now focusing more to develop bilateral
PTAs, RTCAs and FTAs tariff reduction to each
other. As of 20 June 2017, 279 RTAs were in force.
These correspond to 445 notifications from WTO
members, counting goods, services and accessions
separately.

Free trade is a commerce between countries without
government interference and protective duties i.e. an
agreement between various countries to trade goods
and services without preferences, quotas, tariffs or
excise duties.

FTAs allow the partners to give each other
preferential market access. The line between a PTA
and a Free trade area (FTA) may be blurred, as almost
any PTA has a main goal of becoming a FTA in
accordance with the General Agreement on Tariffs
and Trade. While some observers fear that these
arrangements had adverse economic consequences
and have eroded the multilateral system that has
guided international economic relations during the
post-World War II era.

Pakistan has also signed Regional / Bilateral Trade
Agreements, Pak-Afghan Transit Trade Agreement,

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South Asian Free Trade Area, Pak-Malaysia Free
Trade Agreement, Pak- China Free Trade Agreement,
Pak- Sri Lanka Free Trade Agreement, Pak-Mauritius
Preferential Trade Agreements, Pak-Iran Preferential
Trade Agreement, Pak-Indonesia Preferential Trade
Agreement and Pakistan is also negotiating trade
agreement with EFTA countries, Turkey, GCC and
Thailand.

China and Pakistan free trade agreement (FTA)
became effective from July 1, 2007 and had to enter its
second phase towards easing further tariff barriers
after completion of first phase in 2012.

Since entry in WTO, China is a member of WTO since 2001 and
under take to comply with WTO trade
China has introduced commitments such as lowering tariffs,
reducing non-tariff barriers, expanding
progressive reforms market access. Since entry in WTO, China
has introduced progressive reforms mainly
mainly in reducing in reducing import tariffs but some non-
tariff barriers prohibits easy access to the
import tariffs but some Chinese markets.

non-tariff barriers

prohibits easy access to

the Chinese markets

True potential of free trade agreement can be
empirically and analytically examined through pre
and post pattern of bilateral trade. Although volume
of bilateral trade between Pakistan and China has
increased manifold after implementing the free trade
agreement but this increase is mainly due to increase
in the import from China. Pakistan has not been
getting full benefit from this FTA.

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Pakistan is facing continuous trade deficit.

Pakistan- China trade has been growing very
Korea (9.7%), Japan rapidly since the Free Trade Agreement
(8.3%), USA (8.2%) and (FTA) became operational. Pakistan
Taiwan (7.8%) are the exports have increased to US $ 1906.3

major sources of Chinese million in 2016(Post FTA period) from
imports, while Pakistan‟s US $ 575.93 mill in 2006 (pre-FTA
shares 0.1 percent in period) while Pakistan imports from
Chinese imports.
China have increased significantly and
reached at a level of US $ 17,468.6 in the

same period. Share of Pakistan’s exports in
Chinese total imports is 0.19 while share of

Pakistan imports in Chinese exports 0.89%.
Balance of trade between Pakistan and China

is US $ 15562.3 million which is in favour of

PAK - CHINA PATTERN OF 17,468.60
TRADE 16,481.20

13,246.40

Million US$ 11,019.60

9,276.50

3,140.40 3,196.80 2,755.40 2,477.10
2012
2013 2014 2015 1,906.30
EXPORTS IMPORTS 2016

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China. If the growth rate of present trade
between Pakistan

and China maintained, this gap is expected to be
widened. Pakistan – China Free Trade Agreement
(FTA) remained unfavorable or conversely Pakistan is
not deriving potential benefits from this arrangement.

Phase-I -- Tariff Reduction Modality of China within
five years after entry into force of this agreement:

Table-3 Track No. %of
Category of tariff
Tariff line at
No. lines 8 digit
2681 35.5%
I Elimination of Tariff – three
2604 34.5%
years 604 8%
II 0 – 5 % - five years
III Reduction on Margin of 529 7%

Preference of 50% - five years 1132 15%
IV Reduction on Margin of 7550

Preference of 20% - five years
V No Concession

Total
(Source: Ministry of Commerce)

According to Country report on China: Tariff
elimination is on 35.5% of tariff lines only whereas on
34.5% of tariff lines there would be tariff of 0-5%. Out of
remaining 30% tariff lines there would be no concession
at all to 15% (1132 lines) and there would be marginal

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concession to other remaining 15% lines (1133).
Therefore, it is obvious that maximum concession is only
to 35.5% of total tariff lines of 7,550 covered under the
FTA. This is too narrow coverage of bilateral trade and
too low tariff lines if we look at China’s FTAs with other
countries.

As provided in FTA, 90% coverage will be considered in
Phase-II which may start in 2013.

Besides, if we look at the total data of 2009, we find
share of duty free lines applicable to China’s imports
from Pakistan was 19.2%. China’s overall average tariff
on imports from Pakistan was 6.9% in 2009 as compared
to overall MFN average of 9.5. China-ASEAN FTA is in
force since January 1, 2010.

Under this FTA tariff elimination covers 90% of the
goods traded between China and ASEAN countries.
According to this FTA, average tariff rate of China for
ASEAN goods would be 0.1% instead of 9.5%.

Besides, if we compare China’s FTAs with Pakistan and
ASEAN. We will find ASEAN at great advantage as
there is zero percent duty under China-ASEAN FTA on
items.

Which are covered under China-Pakistan FTA where
there is some duty. ASEAN has a clear advantage
rendering Pakistani products less competitive.

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Trade Relations between Pakistan and China before
and after FTAs

(Million US $)

Year Export Import Balance of Trade

2002-03 Before FTA -697
2003-04 -1188
2004-05 260 957 -1913
2005-06 -2408
2006-07 300 1488 -3550

2007-08 436 2349 -4011
2008-09 -2782
2009-10 507 2915 -3812
2010-11 -4792
2011-12 614 4164 -4068
2012-13 -3974
2013-14 After FTA -7336
2014-15 -9084
2015-16 727 4738 -15562

998 3780

1436 5248

1679 6471

2620 6688

2652 6626

2253 9588

1935 11019

1906 17469

Ranking in Trade Enabling Index

Key Indicators Pakistan China

Rank (out of 138)

Merchandise Trade 135 108
Trade openness (imports + exports)/GDP
62 2
Share of world trade (%) 67 1
Total Exports 56 2
Total Imports

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Enabling Trade Index 114 54
Market Access 133 119
Border Administration 72 48
Infrastructure 94 36
Operating Environment 116 37

The Most Problematic Factors for Exporting

Pakistan China

Identifying potential markets Identifying potential markets
and buyers and buyers
Access to trade finance
Technical requirements and
Inappropriate production standards abroad
technology and skills
Access to imported inputs at
competitive prices

The Most Problematic Factors for Importing

Pakistan China

Tariffs Tariffs

Corruption at the border Burdensome import procedures

Burdensome import procedures High cost or delays caused by
international transportation

China – Products

Agriculture Products

Rice, Wheat, Potatoes, Corn, Peanuts, Tea, Millet, Barley,
Apples, Cotton, Oil seed, Pork, Fish

Industrial Products

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Mining and ore processing, Iron, Steel; Aluminum and
other metals, Iron, Steel, Coal, Machine building,

Armaments, Textile and Apparels, Petroleum, Cements,
Chemicals, Fertilizers, Consumer Products (including

footwear, toys and electronics), Food Processing ,
Transportation equipment’s, including auto mobiles, Rails
cars and locomotives, Ships, Aircrafts, Telecommunication
equipment’s, Commercial space launch vehicles, Satellites

Chinese' economy is the second largest in the

world after that of the United States. The
China’s uninterrupted growth is

Pakistan exports to China are characterized by higher productivity,
positively correlated with
China‟s GDP. lower wages, and exploitation of
economies of scale among other

parameters. China’s GDP grew by 10.3%
in 2010 due to buoyant domestic investments

and exports. In 2010 China became the world's
largest exporter. It is notable that growth in

Chinese GDP is showing unpleasant fluctuation

since 2012.

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Real GDP growth (%)

8

7

6 2014 Real GDP growth (%)
2012 2013
2015
2016

Real GDP growth (%)

China is one of the leading China is one of the leading partners of
partners of Economic Economic Development of Pakistan.
Development of Pakistan. Chinese assistance to Pakistan especially
Chinese assistance to in the Development of Sea port, Mining
Pakistan especially in the Projects, Power generation, Bio-
Development of Sea port,

Mining Projects, Power technology, Fishing Sector, Corporate
Bio- Farming and Science and Technology is
generation,

technology, Fishing appreciable. Pakistan and china have
been enjoying amicable economic
Sector, Corporate Farming relations since long. China has provided
Pakistan Technical and financial
and Science and

Technology is appreciable.

assistance for some of the major projects like

Karakoram Highway, Heavy Mechanical
Complex, Forge and Foundry Project, Heavy

Rebuild Factory, Guddu Thermal power Station,
and assistance in Agriculture.

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Pakistan’s economy is facing various challenges which

A trade deficit is not a are contributing low economic growth low
good thing during a value-addition in agriculture and industrial
recession but may production as compared to China, If the
help during an deficit reflects an excess of import over

expansion. exports, it may be indicative of

competitiveness problems. A trade deficit is

not a good thing during a recession but may help during

an expansion. Similarly labour productivity is a revealing
indicator of several economic indicators as it offers a

dynamic measure of economic growth, competitiveness,
and living standards within an economy. It is the

measure of labour productivity which helps explain the
principal economic foundations that are necessary for

both economic growth and social development. There is

noticeable difference between the labour productivity of
the two countries. One of the main reasons for declining

trend in Pakistan’s labour productivity is badly affected
business environment.

Bilateral agreement is When countries trading bilaterally stable
justify when there is a equilibrium in trade have significance
level playing fields. implication and are only possible when

trading partners are endowed with

resources, products should be cost
competitive being produced under the laid down

standards and quality and level playing field available on
both ends. But free trading between the two nations of

the same region having same regional advantages and
similarity in products while one is larger economy

allows fewer benefits to the lesser. Bilateral agreement

is justify when there is a level playing fields.

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Pattern of global trade has also changed

Technical barriers to with the advent of WTO, now countries
trade (TBT) posed by prefer to import/export according to the

WTO has impacted world standard and technical regulations
global trade pattern. laid down by WTO. While Economic

A country‟s TBT research find that the technical barriers
notifications decrease to trade (TBT) posed by WTO has

other countries‟ impacted global trade pattern. Similarly

probability of it has affected bilateral trade between

exporting, but China and Pakistan. This non-tariff

increase their export barrier (NTB) has promoted trade viz-a-
viz restricted trade. Many of China’s TBT
volumes.

protect sophisticated manufacturers. A country’s
TBT notifications decrease other countries’

probability of exporting, but increase their

export volumes.

Before going to negotiate second phase of Pak-China
FTA a Joint Task Force should be constituted including
private sector, associations, apex chamber body and
academia. Pakistan-China trade cooperation should
start with a reduced tariff in a phased manner covering
selected manufactured, services, and agriculture
products over a longer time horizon. The ultimate goal
should be an FTA with a free flow of goods, services and
investment, labour and capital.

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The objective of choosing ASEAN is a part of our efforts
to highlights different blocs where Pakistani products
can penetrate in the markets. ASEAN is a bloc that has
dynamic relations with Pakistan.

The Association of Southeast Asian Nations, (ASEAN)
was established on 8th August 1967 in Bangkok,
Thailand, with the signing of the ASEAN Declaration by
the Founders of AEAN Indonesia, Malaysia, Philippines,
Singapore and Thailand.

Other members Brunei Darussalam joined on 7th January
1984, Viet Nam on 28th July 1995, Lao PDR and
Myanmar on 23rd July 1997, and Cambodia on 30th April
1999, all together making a bloc of ten Member States of
ASEAN.

AIMS AND PURPOSES

As set out in the ASEAN Declaration, the aims and
purposes of ASEAN are:

1. To accelerate the economic growth, social
progress and cultural development in the region

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through joint endeavors in the spirit of equality
and partnership in order to strengthen the
foundation for a prosperous and peaceful
community of Southeast Asian Nations;

2. To promote regional peace and stability through

abiding respect for justice and the rule of law in

the relationship among countries of the region

and adherence to the principles of the United

Nations Charter;

3. To promote active collaboration and mutual
assistance on matters of common interest in the
economic, social, cultural, technical, scientific
and administrative fields;

4. To provide assistance to each other in the form of
training and research facilities in the educational,
professional, technical and administrative
spheres;

5. To collaborate more effectively for the greater
utilization of their agriculture and industries, the
expansion of their trade, including the study of
the problems of international commodity trade,
the improvement of their transportation and
communications facilities and the raising of the
living standards of their peoples;

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6. To promote Southeast Asian studies; and

7. To maintain close and beneficial cooperation
with existing international and regional
organizations with similar aims and purposes,
and explore all avenues for even closer
cooperation among themselves.

TREATY OF AMITY AND COOPERATION IN
SOUTHEAST ASIA

Under the Treaty of Amity and Cooperation in Southeast
Asia (TAC) of 1976, the ASEAN Member States have
adopted the following fundamental principles: :

1. Mutual respect for the independence,
sovereignty, equality, territorial integrity, and
national identity of all nations;

2. The right of every State to lead its national
existence free from external interference,
subversion or coercion;

3. Non-interference in the internal affairs of one
another;

4. Settlement of differences or disputes by peaceful
manner;

5. Renunciation of the threat or use of force; and
6. Effective cooperation among themselves.

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ASEAN COMMUNITY

The ASEAN Vision 2020, adopted by the ASEAN
Leaders on the 30th Anniversary of ASEAN, agreed on a
shared vision of ASEAN as a concert of Southeast Asian
nations, outward looking, living in peace, stability and
prosperity, bonded together in partnership in dynamic
development and in a community of caring societies.

At the 9th ASEAN Summit in 2003, the ASEAN
Leaders resolved that an ASEAN Community shall be
established. At the 12th ASEAN Summit in January
2007, the Leaders affirmed their strong commitment to
accelerate the establishment of an ASEAN Community
by 2015 and signed the Cebu Declaration on the
Acceleration of the Establishment of an ASEAN
Community by 2015.

The ASEAN Community is comprised of three pillars:

1. ASEAN Political-Security Community,
2. ASEAN Economic Community and
3. ASEAN Socio-Cultural Community

ASEAN CHARTER

The ASEAN Charter entered into force on 15th
December 2008. With the entry into force of the ASEAN
Charter, ASEAN will henceforth operate under a new
legal framework and establish a number of new organs to
boost its community-building process.

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In effect, the ASEAN Charter has become a legally
binding agreement among the 10 ASEAN Member
States.

The importance of the ASEAN Charter can be seen in
the following contexts:

 New political commitment at the top level
 New and enhanced commitments
 New legal framework, legal personality
 New ASEAN bodies
 Two new openly-recruited DSGs
 More ASEAN meetings
 More roles of ASEAN Foreign Ministers
 New and enhanced role of the Secretary-General

of ASEAN
 Other new initiatives and changes

ASEAN PLUS THREE

The leaders of each country felt the need to further
integrate the nations in the region. Beginning in 1997,
the bloc started creating organizations with the intention
of achieving this goal. "ASEAN Plus Three" was the
first of these and was created to improve existing ties
with the People's Republic of China, Japan, and South
Korea.

ASEAN PLUS SIX

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ASEAN became ASEAN Plus Six with additional
countries: Australia, New Zealand and India.
Codification of the relations between these nations has
seen progress through the development of the
Regional Comprehensive Economic Partnership (RCEP),
a proposed free-trade agreement involving the 16
countries of ASEAN plus six. RCEP would, in part,
allow the members to protect local sectors and give more
time to comply with the aim for developed country
members.

PAKISTAN RELATIONS WITH ASEAN:

Pakistan was accorded the status of sectoral dialogue
partner of ASEAN at the 26th ASEAN Ministerial Meeting
on 23 July 1993.

ASEAN-Pakistan Sectoral Dialogue Partnership covers
cooperation in trade, industry, investment, environment,
science and technology, drugs and narcotics, tourism and
human resources development. The ASEAN-Pakistan
Sectoral Dialogue Relations was institutionalized through
the convening of the First Meeting of the ASEAN-Pakistan
Joint Sectoral Cooperation Committee (AP-JSCC) on 5
February 1999 in Bali.

Pakistan acceded to the Treaty of Amity and Cooperation
in Southeast Asia on 2 July 2004 in Jakarta. On the same
day Pakistan was also admitted as the 24th participant of the
ASEAN Regional Forum (ARF).

Volume of trade between Pakistan and ASEAN In 2016
was US $ 6.3 billion, a negative growth by 3.4% from the

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previous year‟s figure of US $ 6.6 billion. ASEAN‟s
exports to Pakistan in 2016 were US $ 5.5 billion while
imports by ASEAN reached US $ 0.8 billion. Foreign
Direct Investment from Pakistan to ASEAN significantly
increased from US $ -19.86 in 2016 to US $ 45.23 million
in 2016.

ASEAN and Pakistan have undertaken a Joint Feasibility

Study for an ASEAN-Pakistan Free Trade Agreement

(FTA) to enhance and expand the overall ASEAN-Pakistan

economic engagement

TRADE BETWEEN PAKISTAN & ASEAN
COUNTRIES

PAK - ASEAN COUNTRIES
PATTERN547O4.2F TRADE
5154.2 4956.8
4742.9
4915.7

Million US$

1092.8 968.9 1119.9 1050.9
2012
818.6

2013 2014 2015 2016
EXPORTS
IMPORTS Page | 22

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PRECIOUS BIRD OF
THE POOR REGION

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Joy is a peacock-it's beauty so rare;
A rainbow of colors that vibrantly flare.

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Never forgot, this vision, joyfully it illuminates.

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The peacock is one of the oldest birds associated with
the history of mankind. Everyone knows that the most

fabulous throne in the world was
named after the peacock. A
number of empires in the
subcontinent were named after
this most beautiful pheasant.
Peafowl (Peacock) found in
three kinds in Asia Pavo and
Afropavo of the Phasianidae
family, the pheasants and their
allies.

A blue peafowl (peacock) is a famous and
belongs to India, Pakistan Sri Lanka while Green
Peafowl belongs to Myanmar, Indochina and
java. The term peacock
is properly reserved for
the male; the female is
known as a peahen, and
the immature offspring
are sometimes called
peachicks. The peacock
has played its dynamic
role in Sub-continent
history. Peacocks were
supposed to guard the
palaces of Rajas in India. Five peacocks‟ eight
ospreys and nine water-fowls kept watch over

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queen Koklan‟s palace according to one version
of the legend of Raja Rasalu.

The Moghuls glorified the peacock. Shah Jahan built Taj
Mahal commissioned hundreds of goldsmiths to make a
throne that should be a wonder in the world and gave

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them seven years‟ time. These craftsmen put their heart
and soul in the making of a throne and supported it by
twelve emerald columns. They made a canopy for the
throne made of an exquisite piece of silk embroidered
with diamonds.
Two peacocks were thickly set on the throne with gems
and between them was a tree with foliage of rubies,
diamonds and pearls. The peacock throne cost the
Moghul Emperor Rs 71 million at that time. The Romans
used the peacock for ornamental purposes. In fact, the
Greeks and Romans prized the peafowl on account of its
beauty and its meat.
The peacock is the only bird that has commanded respect
from people all over the Orient irrespective of their caste
colour and creed affiliations. Peacock enjoys
inviolability in most of the countries of Asia.

But, unfortunately, the precious bird of the poor region is
facing challenges of its survival, many threat to its

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Dynamics of Automobile

of Pakistan CODE ABBREVIATION
AIDP
The auto industry plays a key Auto Industry Development Program
role in world’s economic APMA / Policy
growth. The industry also Association of Pakistan Automobile
plays a major role in overall APMDA Assemblers
business cycle and following
are the auto industry CBU All Pakistan Motor Dealers
highlights of Pakistan in CKD Association
global and local scenario: CPEC Completely Built Up
FY Completely Knocked Down
 If auto manufacturing is GDP China Pakistan Economic Corridor
a country, it would be OEM
PAAPAM Fiscal Year
Gross Domestic Product
PAMA Original Equipment Manufacturer
Pakistan Association of Automotive
SBP Parts and Accessories Manufacturers
SKD Pakistan Automotive Manufacturers
TBS Association
WTO State Bank of Pakistan
Semi Knocked Down

Tariff Based System
World Trade Organization

the sixth largest economy. In total, it makes about 5% of

world’s total manufacturing employment.

 Domestically, its contribution to the government’s

revenue is around Rs7.5 billion roughly 3% of the GDP.

 An average monthly import of used cars stood at 6,800

units ―during the first five months of FY2018― as

compared to around 4,600 units/month in FY2017.

 Total truck sales climbed to 4,252 from 3,304 ―while bus

sales fell to 310 from 577 units in July-Dec 2017― as

compared to the same period last year. The production of

trucks is forecasted to increase over the years in line with

the CPEC projects.

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 The local industry is trying to increase its reliance on local
content with tractors leading the way, utilizing 88% of
locally produced content followed by motorcycles utilizing
77%.

 SBP’s data showed that taxes differential on account of
duties on cars come at around $564 for below 800cc, $705
for 801 to 1000cc, $1,409 for 1001 to 1300cc and $1,973 for
1301 to 1500cc.

 The biggest sector in CBU imports is of motor cars,
whereas the CKD/ SKD imports are dominated by
motorcycles.

There are a number of associations within the auto industry
that look-after the interests of sub-sectors such as PAMA
(Pakistan Automotive Manufacturers Association), All
Pakistan Motor Dealers Association (APMDA), Pakistan
Association of Automotive Parts and Accessories
Manufacturers (PAAPAM), Association of Pakistan
Automobile Assemblers (APMA). A closer analysis of
common issues of above stated associations is lack of
support and industry friendly policies. The industry
contributes 3% of the GDP― offering employment to 3.5
million individuals.

Factors such as weak infrastructure, imposition of duties on
auto parts imports, regulations imposed on steel material,
increasing tariffs on imports of raw materials ― paralyzing
the local industry to compete with global competitors ―
adding cost of doing business. The increase in imports of
motorcars under CBU having interesting dynamins ― Last

Page | 32

quarter of 2017 witnessed the 71 percent increase (July-
Nov) of car imports as compared to the previous year. CKD/
SKD units imports also increased by 26% in July-Nov 2017.
The government’s intention is to curb the imports of used
cars and support the local production ― to add in revenue
and reduction in import bill.

The devaluation of Pakistani rupee in international market
against dollar causing price increase and consumer is
holding the burden. The increase of price is having less
impact on demand due to many reasons on automobile
products.

The first joint venture with Suzuki Motors of Japan was
formulated in early 1970s and government actively
participated in auto mobile sector and permitted the foreign
players in local market as OEM for CKD production ― to
address the issues of descent transportation product.

This was followed by local content protection and deletion
program formulated by government. Pakistan adopted the
compliance framework under umbrella of international rules
of WTO in trade liberalization era and introduced Tariff
Based System (TBS). Hence, the policies of automobile
manufacturing formulated were meant to create a supportive
environment to boost the production and sales of automobile
finished items.

In 2007, the Auto Industry Development Program (AIDP)
was launched to implement the reformed policy interventions

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and encourage the Original Equipment Manufacturers
(OEMs), Vendors and new Investors.

The AIDP focused to strengthen the medium and long-term
progress of automobile industry and acquire technology
transfer ―to accelerate the sustainable progress. On
contrary, Auto Industry Development Program (AIDP)
remained weak to ensure the environmental protocols as
prescribed by global institutions ― this also includes the
ignorance quality and safety standards.

The second phase of Auto Industry Development Policy
(AIDP) 2016-21 is further reformed ― to enhance the
industrial growth and stabilize the sector contributing to
GDP― within environmental sustainable framework.

Beside this, security issues, power crisis, slow economic
growth, inflation and natural calamities are foremost
challenges. The India promotes the manufacturing of small
and mid-sized cars to maximize the utility of affordability ―
caused significant raised in sales of car within lower middle
segment of society.

The India contributes up-to 0.9 percent of world’s car
exports― Turkey’s 1.2 percent and Saudi Arabia 0.1
percent. While, 0.03 percent of India, 0.3 percent of Iran
and 0.1 percent of Pakistan in global imports of cars.

Table ― 1: Commodities Imported by

Automobile Sector of Pakistan 2016
-17
Commodities 2010 2011 201 2013- 2014- 201
(Million PKR)
-11 -12 2-13 14 15 5-16

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ROAD MOTOR VEH. 117, 148, 140, 126,0 162,7 201, 263,
(BUILD UNIT,CKD/SKD) 172 265 450 84 714
60 564
76,0
a. CBU 19,4 46,8 45,4 32,64 41,21 56,9 13

52 82 40 1 8 81 32,3
34
BUSES, TRUCKS & 6,46 13,4 15,1 13,86 13,16 22,7
OTH. HEAVY VEHICLES 1 43,3
99 00 1 2 07 66

MOTOR CARS 12,9 33,3 30,1 18,24 27,87 33,9 313

30 00 95 8 9 68 107,
803
MOTOR CYCLES 61 83 145 532 177 306
27,5
b. CKD/SKD 55,7 65,7 58,0 56,97 78,15 86,2 47

74 33 85 6 0 17 70,6
14
BUSES, TRUCKS& OTH. 9,29 14,1 11,6 13,30 20,17 22,3
HEAVY VEHICLES 9 9,64
13 10 6 1 28 2

MOTOR CARS 40,0 43,5 38,2 35,94 48,81 54,1 52,0
54
45 00 36 1 0 05
27,8
MOTOR CYCLES 6,43 8,12 8,23 7,729 9,169 9,78 44

0 09 4

c. PARTS & 28,1 27,7 28,7 28,18 32,42 39,7
ACCESSORIES
19 80 25 0 9 35

d. OTHERS 13,8 7,87 8,20 8,287 10,96 18,6

27 0 0 3 31

Source: Pakistan Bureau of Statistics (Monthly Summary on Foreign Trade

Statistics)

Table ―1 explains the basic dynamics of automobile sector
of Pakistan. The demand trend of motorcars in CBU
segment is rising ― which indicates the progress of local
producers. The same phenomenon is with motorcycles in
CKD/SKD segment.

The significant balk of consumer prefers imported/used cars
due to many reasons ― causing positive shift of import bill.
The rapid growth is witnessed in motorcycle sector ― with
major companies posting profits such as Atlas Honda. Rise

Page | 35

of bike sales sharing services contribution has increased the
demand of bikes.
The automobile sector recorded the highest growth of 11.31
percent in July-March 2016-17. And, growth in sales of
tractors 72.90%, trucks 39.31%, buses 19.71%, Jeeps &
Cars 4.68% and Motorcycles 21.35% is indicators of
production demand.

The auto financing by financial sector is the additional factor
in this regards. In FY16-17, the sum of auto financing loan
was Rs70.5 billion as compared to Rs44 billion in FY15-16.
The Asaanrozgar scheme and stability in security condition
played supportive role in expansion.
The sales of Trucks indicate the cargo and supply chain
growth of production and trade. The heavy investment in

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infrastructural projects under umbrella of CPEC― demand
of modern truck is significantly increased.
It is concluded that:

 There is an enormous potential in automobile
industry to grow and significant potential of export to
progress.

 The technological advancement, removal of
inefficiencies, industry friendly procedures are policy
level challenges.

 The macroeconomic stability especially interest rate
and individual disposal income is linked with
automobile growth ― government may need to
stabilize same.

 The imports of car may need to address with
professional practice. It is rising the import bill and
loss of local revenue.

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Transforming Our World: The 2030
Agenda for Sustainable Development

------------------------------------------------------------------
Sustainable Development Goals SDGs have critical
significance for Pakistan and demand pro-active role of
private sector for its success.

The SDGs are a follow-up effort to the widely-
publicized Millennium Development Goals, or MDGs
that were in effect from 2000 to 2015.

In 2015, countries find to
move further from the set
MDGS and adopted a
set of goals to end
poverty, protect the
planet, and ensure
prosperity for all as part
of a new sustainable
development agenda.
Each goal has specific
targets to be achieved
over the next 15 years.

The sustainable
development goals deal
with 17 different issues and are to play a major role in
policy making. They act as the successor to the

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Millennium Development Goals, and pace up the
momentum in terms of overall development.

Goal 1: No Poverty:

End poverty in all its forms
everywhere

To make the goals more tangible
and understandable, every goal is
divided into detailed targets. Goal 1
consists of these 7 targets.

1.1. Eradicate Extreme Poverty:

By 2030, eradicate extreme poverty for all people
everywhere, currently measured as people living on less
than $1.25 a day.

1.2. Reduce Poverty at least by 50%

By 2030, reduce at least by half the proportion of men,
women and children of all ages living in poverty in all its
dimensions according to national definitions.

1.3. Implement Social Protection Systems

Implement nationally appropriate social protection
systems and measures for all, including floors, and by

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2030 achieve substantial coverage of the poor and the
vulnerable.

1.4. Equal Rights to Ownership, Services and
Economic Resources

By 2030, ensure that all men and women, in particular
the poor and the vulnerable, have equal rights to
economic resources, as well as access to basic services,
ownership and control over land and other forms of
property, inheritance, natural resources, appropriate new
technology and financial services, including
microfinance.

1.5. Build Resilience to Environmental, Economic
and Social Disasters

By 2030, build the resilience of the poor and those in
vulnerable situations and reduce their exposure and
vulnerability to climate-related extreme events and other
economic, social and environmental shocks and
disasters.

1.A. Mobilize Resources to Implement Policies to End
Poverty

Ensure significant mobilization of resources from a
variety of sources, including through enhanced
development cooperation, in order to provide adequate

Page | 40

and predictable means for developing countries, in
particular least developed countries, to implement
programmes and policies to end poverty in all its
dimensions.

1.B. Create pro-poor and gender-sensitive policy
frameworks

Create sound policy frameworks at the national, regional
and international levels, based on pro-poor and gender-
sensitive development strategies, to support accelerated
investment in poverty eradication actions.

Goal 2: Zero
Hunger:

End hunger, achieve
food security and
improved nutrition
and promote
sustainable
agriculture.

2.1 Universal access to safe and nutritious food

By 2030, end hunger and ensure access by all people, in
particular the poor and people in vulnerable situations,
including infants, to safe, nutritious and sufficient food
all year round.

2.2 End all forms of malnutrition

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By 2030, end all forms of malnutrition, including
achieving, by 2025, the internationally agreed targets on
stunting and wasting in children under 5 years of age,
and address the nutritional needs of adolescent girls,
pregnant and lactating women and older persons.

2.3 Double the productivity and incomes of small-
scale food producers

By 2030, double the agricultural productivity and
incomes of small-scale food producers, in particular
women, indigenous peoples, family farmers, pastoralists
and fishers, including through secure and equal access to
land, other productive resources and inputs, knowledge,
financial services, markets and opportunities for value
addition and non-farm employment.

2.4 Sustainable food production and resilient
agricultural practices

By 2030, ensure sustainable food production systems
and implement resilient agricultural practices that
increase productivity and production, that help maintain
ecosystems, that strengthen capacity for adaptation to
climate change, extreme weather, drought, flooding and
other disasters and that progressively improve land and
soil quality.

2.5 Ensure genetic diversity in food production

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By 2020, maintain the genetic diversity of seeds,
cultivated plants and farmed and domesticated animals
and their related wild species, including through soundly
managed and diversified seed and plant banks at the
national, regional and international levels, and promote
access to and fair and equitable sharing of benefits
arising from the utilization of genetic resources and
associated traditional knowledge, as internationally
agreed.

2.A Invest in rural infrastructure, agricultural
research, technology and gene banks

Increase investment, including through enhanced
international cooperation, in rural infrastructure,
agricultural research and extension services, technology
development and plant and livestock gene banks in order
to enhance agricultural productive capacity in
developing countries, in particular least developed
countries.

2.B Prevent agricultural trade restrictions, market
distortions and export subsidies

Correct and prevent trade restrictions and distortions in
world agricultural markets, including through the parallel
elimination of all forms of agricultural export subsidies
and all export measures with equivalent effect, in
accordance with the mandate of the Doha Development
Round.

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2.C Ensure stable food commodity markets and
timely access to information

Adopt measures to ensure the proper functioning of food
commodity markets and their derivatives and facilitate
timely access to market information, including on food
reserves, in order to help limit extreme food price
volatility.

Goal 3: Good Health and
Well-Being:

Ensure healthy lives and
promote well-being for all at
all ages.

3.1 Reduce maternal
mortality

By 2030, reduce the global maternal mortality ratio to
less than 70 per 100,000 live births.

3.2 End preventable deaths under 5 years of age

By 2030, end preventable deaths of newborns and
children under 5 years of age, with all countries aiming
to reduce neonatal mortality to at least as low as 12 per
1,000 live births and under-5 mortality to at least as low
as 25 per 1,000 live births.

3.3 Fight communicable diseases

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By 2030, end the epidemics of AIDS, tuberculosis,
malaria and neglected tropical diseases and combat
hepatitis, water-borne diseases and other communicable
diseases.

3.4 Reduce mortality from non-communicable
diseases

By 2030, reduce by one third premature mortality from
non-communicable diseases through prevention and
treatment and promote mental health and well-being.

3.5 Prevent and treat substance abuse

Strengthen the prevention and treatment of substance
abuse, including narcotic drug abuse and harmful use of
alcohol.

3.6 Reduce road injuries and deaths

By 2020, halve the number of global deaths and injuries
from road traffic accidents.

3.7 Universal access to reproductive care, planning
and education

By 2030, ensure universal access to sexual and
reproductive health-care services, including for family
planning, information and education, and the integration
of reproductive health into national strategies and
programmes.

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3.8 Achieve universal health coverage

Achieve universal health coverage, including financial
risk protection, access to quality essential health-care
services and access to safe, effective, quality and
affordable essential medicines and vaccines for all.

3.9 Reduce illnesses and death from hazardous
chemicals and pollution

By 2030, substantially reduce the number of deaths and
illnesses from hazardous chemicals and air, water and
soil pollution and contamination.

3.A Implement the who framework on tobacco

Strengthen the implementation of the World Health
Organization Framework Convention on Tobacco
Control in all countries, as appropriate.

3.B Support research, development and universal
access to affordable vaccines and medicines

Support the research and development of vaccines and
medicines for the communicable and non-communicable
diseases that primarily affect developing countries,
provide access to affordable essential medicines and
vaccines, in accordance with the Doha Declaration on
the TRIPS Agreement and Public Health, which affirms
the right of developing countries to use to the full the
provisions in the Agreement on Trade-Related Aspects

Page | 46

of Intellectual Property Rights regarding flexibilities to
protect public health, and, in particular, provide access to
medicines for all.

3.C Increase health financing and workforce support
for developing countries

Substantially increase health financing and the
recruitment, development, training and retention of the
health workforce in developing countries, especially in
least developed countries and small island developing
States.

Goal 4: Quality Education

Ensure inclusive and
equitable quality education
and promote lifelong
learning opportunities for all.

4.1 Free primary and secondary education

By 2030, ensure that all girls and boys complete free,
equitable and quality primary and secondary education
leading to relevant and effective learning outcomes.

4.2 Equal access to quality pre-primary education

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By 2030, ensure that all girls and boys have access to
quality early childhood development, care and pre-
primary education so that they are ready for primary
education.

4.3 Equal access to affordable technical, vocational
and higher education

By 2030, ensure equal access for all women and men to
affordable and quality technical, vocational and tertiary
education, including university.

4.4 Increase the number of people with relevant skills
for financial success

By 2030, substantially increase the number of youth
and adults who have relevant skills, including technical
and vocational skills, for employment, decent jobs and
entrepreneurship.

4.5 No discrimination in education

By 2030, eliminate gender disparities in education and
ensure equal access to all levels of education and
vocational training for the vulnerable, including persons
with disabilities, indigenous peoples and children in
vulnerable situations.

4.6 Universal literacy and numeracy

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By 2030, ensure that all youth and a substantial
proportion of adults, both men and women, achieve
literacy and numeracy.

4.7 Education for global citizenship

By 2030, ensure that all learners acquire the knowledge
and skills needed to promote sustainable development,
including, among others, through education for
sustainable development and sustainable lifestyles,
human rights, gender equality, promotion of a culture of
peace and non-violence, global citizenship and
appreciation of cultural diversity and of culture‟s
contribution to sustainable development

4.A Build and upgrade inclusive and safe schools

Build and upgrade education facilities that are child,
disability and gender sensitive and provide safe, non-
violent, inclusive and effective learning environments for
all.

4.B Expand higher education scholarships for
developing countries

By 2020, substantially expand globally the number of
scholarships available to developing countries, in
particular least developed countries, small island
developing States and African countries, for enrolment

Page | 49

in higher education, including vocational training and
information and communications technology, technical,
engineering and scientific programmes, in developed
countries and other developing countries.

4.C Increase the supply of qualified teachers in
developing countries

By 2030, substantially increase the supply of qualified
teachers, including through international cooperation for
teacher training in developing countries, especially least
developed countries and small island developing States.

Goal 5: Gender Equality

Achieve gender equality and
empower all women and girls.

5.1 End discrimination
against women and girls

End all forms of discrimination against all women and
girls everywhere.

5.2 End all violence against and exploitation of
women

Eliminate all forms of violence against all women and
girls in the public and private spheres, including
trafficking and sexual and other types of exploitation.

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