Informal Opening Remark:

Ladies and gentlemen:
Merhaba!

I realize congress sessions in the afternoon can be quite tiring at times, but you can all sit back and relax. Mine is not a speech – it is a love story - for romance is the only word that can rightly describe the relationship between Turkey and Pakistan. This Congress is becoming more and more interesting – a while ago you heard our very distinguished Turkish friend, Mr. Erdal Guven talking about the Japanese Experience, and now you have here a Turkce speaking Pakistani, telling you about your country, Turkey.
Please stay with me! 

Honorable Professor Sabri Orman,
Distinguished Delegates, Excellencies,
Ladies and Gentlemen:

It is a matter of great honor and pleasure for me to be able to speak to such a distinguished gathering, in my beautiful city of Istanbul. I feel I am entitled to use the possessive adjective “my”, with Istanbul, on the basis of a number of very valid reasons:

My wife Samra (a Pakistani like me) and I had our honeymoon in Istanbul in the year 1982; we lived in Turkey for ten years till 1992; both our sons, Hasan and Mohsin, were born in Istanbul, and Turkce happens to be our most preferred language.

Ladies and Gentlemen:

I must admit I was a bit humbled when I went through the list of the distinguished delegates to this Congress. Mine is probably the only name that does not have the title of “Professor” or “Doctor” as a prefix. But you know, how Investment Bankers come - unbranded yet quite expensive. As to what sort of a perspective I could bring to this Congress I did not have to wonder much. I bring to this Congress the perspective of a Private Sector Practitioner.

In the next 15 minutes I am going to give you a bird’s eye view, from the privileged vantage position of a friendly foreigner who is no stranger or “Yabanci” to Turkiye. I will speak about Turkey, as I found it in the early 1980s, the transformation in the decade that followed and its consolidation in the next decade. Then I will talk about Pakistan – undoubtedly - A land of many splendors. Its economic relationship with Turkey, current levels, problems and challenges and finally: The Way Forward.

When I landed at the Istanbul Airport, in October 1982 with the mandate to establish a Branch of the Pakistani Bank, Habib Bank Limited here, this is what I saw:

• very polite, friendly and hospitable people on the streets as they are today
• hardly anybody understood or spoke any English.
• bureaucratic red tape was at its worst- we had to hire a lawyer to get telephone connections
• inflation and depreciation of the Turkish Lira were both over 60 percent
• banks were lending to prime clients at around 100 percent.
• extreme shortage of Banking staff who could speak English AND
• minimum time in which an Import Letter of Credit could be opened was about a month.

Distinguished delegates, ladies and gentlemen;
Turkey today is equally good-humored and hospitable, equally rich in its traditions yet much more economically pro active, professional and progressive. The decade of 1980’s marked a crucial turning point in Turkey’s socio-economic structure and politics. Turkey’s links with Europe became a major driver behind the country's development - the domestic market is booming, the country has seen sustained growth rates over the last five years, and reforms are ongoing. I am sure this eminent congress would join me in appreciating and applauding the significant geopolitical and strategic roles that Turkey plays in the world, its position as a bridge between civilizations, its growing potential as a major energy corridor and a big consumer market. The large source of skilled labor and a modern Financial Services Market are all characteristics that make Turkey stand out. Turkey has opened its economy to an impressive degree. The success of the reforms is well reflected in the macro economic indicators of Turkey today.
Ladies and gentlemen;

When we look at Pakistan, Pakistan today, is a nation of 160 million intelligent, industrious and hardworking persons. The country is strategically located at the hub of three vital regions namely, South Asia, Central Asia and West Asia that provides the shortest route to the sea for the landlocked countries of Central Asia and for Western China. Our port at Karachi and the upcoming deep-water port at Gawadar are being linked through a road and rail transportation network that will connect all three regions. Our foreign policy is friendly and based on regional cooperation.

The Pakistan government’s economic reforms are focused on:

• de-regulation,
• liberalization 
• privatization
• ensuring better fiscal and monetary discipline.
• increasing revenue generation
• creating an enabling environment.
• recognizing private sector as a major driver of economic growth

The success of the reforms can be seen from the following results:

• GDP growth of 7 % over the last few years.
• Exports have doubled over the last five years to US Dollars 17 billion
• FDI has increased by 238 % in the year 2005-06 mainly from US, UK, Japan & UAE.
• Foreign Exchange Reserves have increased by four times
• The Karachi Stock Exchange Index (KSE 100) has climbed from 1300 to over 12,000 since 1999.

Pakistan’s consistency in the implementation of strong macro economic changes is on track. We currently have one of the best-regulated Banking Sectors where strong presence of Investment Banking is visible. The investment banks are channeling Foreign Direct Investment into Pakistan through Private Equity Placements. There is an upsurge of investments into Pakistan from countries in Middle East, into various mega projects. This speaks volumes of the economic friendly environment of Pakistan. The upcoming Privatization Transactions are the result of confidence that is placed in the private sector.

Pakistan is a strong nuclear fort in the region that stands tall as an economic power and one of the most advantageous geographically positioned countries.

Ladies and Gentlemen;

It is said that “Turkey and Pakistan are two countries one nation”. However, it is a matter of concern that existing level of trades and investment between Turkey and Pakistan are not at all reflective of the cordial, historic, cultural and religious ties between our two brotherly countries.

• The present volume of trade between these two countries is only US Dollars 506 million.
• Imports from Turkey form a meager 0.46% of total imports of Pakistan
• Exports to Turkey form 2.16% of Pakistan’s export. Similarly,
• Imports by Turkey from Pakistan form 0.27.% of Turkey’s total imports and
• Exports to Pakistan form 0.1 % of Turkey’s overall exports.

Certainly not something we can be proud of!

The major items of Pakistan’s import are specialized machinery, essential oils and rubber manufacturing material whereas major export items are cotton fabrics, chemicals and allied products and synthetic textiles. FDI between the two countries is almost negligible.

Ladies and Gentlemen:

The often-quoted reason for this unsatisfactory volume of bilateral trade is that both economies are parallel and trade in nearly the same products that result in similar target markets.
A convenient excuse for our complacency?  Maybe!

I strongly feel that the way forward lies through identifying the stakeholders and redefining their respective roles. The Governments of both countries in their presently stated roles are promoters and facilitators. They should play their roles in removing the following macro level hurdles, namely:

• Irregular shipping service

• Indirect and infrequent flights of both national carriers namely THY and PIA and more expensive than normal airfares
• Non existence of proper land route transportation
• Business visa procedures are not very simple and counters are not available at all majors town.

It is my firm conviction that the real drivers of the bilateral economic activity happen to be the private sector entrepreneurs of both the countries. They should play their due role in identifying the commercially viable propositions and pursue them to their logical conclusions, in a professional manner.
I see the way forward through shifting our focus from the short-term objective of trade in goods and services to a more strategic objective of integration through joint investments in each other’s countries. It is my belief that an increase in the flow of goods and services would automatically follow. The Investment Banks Association of Pakistan (of which I am the current Chairman) feels that there are a number of projects where opportunities of Turkey Pakistan Joint Ventures exist. In view of the time constraint I will comment only on a few options. However The Investment Banks Association of Pakistan and my Bank, Escorts Investment Bank would be very pleased to offer a comprehensive list of Projects and detailed Feasibilities and Advisory Services on selected Projects.

As a matter of fact, Escorts Investment Bank is about to launch a Country Specific Advisory Service, under the name of, Merhaba Turkiye!, andI am in touch with a major Turkish Bank for the launch of a correspondent service, here in Turkey, by the name of Salam Pakistan!

Ladies and Gentlemen:
The pace of overall growth in Pakistan has catalyzed investment in the fields of Housing, Tourism, Infrastructure, Telecom and Energy.  Number of Joint Ventures are being entered into for mega scale Housing Development Projects with countries such as Indonesia and Malaysia. I am personally aware of a number of Turkish International Construction and Contracting Companies who possess the recourses, know-how and the experience to play a dominating role in this, and many other fields.

Pakistan is already facing shortage of 1200 Mega Watts in terms of its electrical energy requirements. LOI’s are being issued to various companies of western origin for setting up coal-based power plants.

The telecom industry of Pakistan has been one of the most growing sectors of the world. Investments into the telecom have come from many foreign countries and currently there are over 35 million mobile connections in use in the country. The Hotel and Hospitality service industry in Pakistan has experienced a phenomenal growth over the last few years and currently hotels are operating at over 100% occupancy levels in cities of Lahore, Karachi and Islamabad (my own Group is setting up a five star hotel at Islamabad in collaboration with an international franchise ‘Inter-continental’). Potential in the Resort Tourism is at its highest for the local population whose disposable income has increased.

Ladies and Gentlemen:

The investment into Business Process Outsource Companies (BPO) is very exciting.. Major Industries utilizing the services of BPO are Banking, Financial Services, Insurance, Health Care, IT Services, Travel and Telecommunications.

US companies presently spend over US Dollars 120 billion per year on BPO services.  Fortune 500 customers are looking for multi-country solutions to mitigate location exposure. India alone generated US Dollars 12.8 billion in 2004-2005.  Revenues generated through Software Exports and Outsourcing in Pakistan for 2004-2005 were at US Dollars 300 million

Pakistan has a visible Advantage in the region in terms of:

• Lowest Bandwidth costs.
• English speaking and educated population
• Low Operating Cost
• Dual Fiber Cable Systems *Sea Me We-3 and Sea Me We-4 Connecting the Country.
• The Government of Pakistan provides various incentives. Details of which can be had from the Website of Pakistan Software Export Board. A major incentive is that the Income generated from I.T Enabled Services is Tax Exempt till the Year 2016.

What are the synergies for the Turkey – Pakistan Partnership?
This business has two main elements: Marketing or Front Office and the Operational Back Office setup. Turkey has a very obvious “Marketing Edge” over Pakistan for Europe and even for the US. Pakistan on the other hand possesses all the comparative advantages for the Back-end setup.

Ladies and Gentlemen:

Let me conclude by addressing the Governments and Private Sector Entrepreneurs of both Turkey and Pakistan. 
Relationships between nations are no different from those between persons. Both have to be protected and nurtured with consistent care. Our ancestors have left us the golden legacy of a great and selfless relationship between Turkey and Pakistan. We owe it to our coming generations that we pass on this beacon from generation to generation. Let not our complacency, inefficiency, miscalculation or some externally inspired storm of commercial expediency dampen the glow of this torch, for it is our joint national treasure.  
At the same time,  we should also not loose sight of the fact that in the context of the present day realities, shared commercial economic interest is the single most important binding force between any two countries. Meaning full and mutually beneficial economic interaction is of paramount importance. History will not forgive us if we do not play our respective roles in the light of this reality.  My greatest fear is that our generations to come may neither remember the sacrifices of the Pre Pakistan Indian Muslims towards the Turkish National Liberation Movement nor the more recent Turkish support and assistance for the victims of last years earthquake in Pakistan.

Let the statistics to be quoted in the next year’s TASAM Congress show that you all listened to me. 

Thank you.

  * South East Asian Middle East Western Submarine Cable No. 3