Tourism and Ceylon Tea are Not Promoted in Pakistan
By Sulochana Ramiah Mohan
The President of the Employers’ Federation of Pakistan Ismail Suttar was in Sri Lanka with Prime Minister Imran Khan recently. He was part of the business delegation who held discussions on boosting trade ties between both countries.
Suttar, a Business Administration graduate from the International University, Missouri, USA is the CEO and Managing Director of HubSalt. He spoke to Ceylon Today about how a business can thrive while moving out of traditional trade ties and practices. He also said that to his knowledge Ceylon Tea and Sri Lanka tourism are not promoted in Pakistan. He preferred the flavour of Kenyan tea far better than Sri Lankan tea and felt it was the root cause why Kenyan tea overtook Ceylon tea in his country.
Excerpts of the interview:
What does this visit to Sri Lanka means for the Pakistan business delegation?
A: We have come from multiple sectors like construction, cement, food and vegetable importers, exports and textile exporters. Our garment exporters want to learn the art of fine tuning the processing of garments (stitching, processing readymade garments) as the Sri Lankan productivity of garments is higher than Pakistan’s. There is a vacuum in this area. Pakistani textile experts have met your garment industry members’ apparel association and are trying to set up meetings and get information to adopt.
Trade ties between Sri Lanka and Pakistan has always been a traditional market but how do you intend to get to the next level in the current context where economy is the key for development?
A: If you take Singapore what do they have? Basically nothing but they are huge cargo handlers and their volumes and revenues Pakistan and Sri Lanka together cannot match. We have decided we will create manufacturing hubs. For example, Bangladesh have zero cotton produce and have nothing connected to textile but they are around USD 25 billion exporters of textile. So, we can work on a similar framework and Sri Lanka can go into large scale chemical manufacturing. We hear that Sri Lanka is keen on chemical production which is Pakistan’s interest too. As our Prime Minister Imran Khan said let both countries collaborate to become the industrial hub of the world in South Asia. Sri Lanka has a highly disciplined skilled workforce which is an advantage. We can enter into many areas together besides following the traditional market of buying and selling. There are non-traditional items such as minerals we can work on. Pakistan has 92 varieties of minerals. Sri Lanka is buying lime for water treatment from different countries and we have it in galore. Even processing of lime is easy and Sri Lanka can produce its own hydrated lime and export it to other countries within a short span of time. I represent the Employers’ Federation of Pakistan and we were working on lime imports that would give fast results. We should keep aside the long-term trade strategy and work on short-term trade results. We have identified several mineral products where chemical conversion is required. Chemical industry is a trillion dollar industry. If we could get USD 50 billion business in this area it would be a huge leap for both countries.
Do you see China in Sri Lanka doing business similar to what they do in Pakistan? Both countries are members of the Belt and Road Initiative (BRI) of China? Why does not Pakistan invest in the Hambantota Port?
A: There is an issue, it seems. Sri Lanka should invite Pakistan businesses to the Hambantota Port. At this conference no one presented any proposals to invest in ports. We need to see what can be done there.
We notice Pakistan is not part of the geopolitical race. Especially in the current context when all countries have engaged in tug-of-war with Sri Lanka because of the Chinese presence?
A: Having studied the background, that is why we have come now with Premier Khan with around 40 businessmen to initiate projects and business ties.
For Pakistan it is easier to do business with China obviously due to the logistics and close connectivity and Premier Khan said the China – Pakistan Economic Corridor (CPEC) would boost trade and urged Sri Lanka to join too. Can you explain how can Sri Lanka benefits joining CPEC? Firstly, how is China going to benefit?
A: The CPEC is basically an investment project. If somebody comes and invests in two members of a family, the entire household will benefit, is the concept. It’s about inducting cash flows in the economy, so, we have invited China and our PM has invited your country to join CPEC. Our PM also requested the business community of Sri Lanka to invest in Pakistan as we are setting up manufacturing hubs.
Khan spoke about trade that could be boosted and reach central Asia though CPEC. Shed some information?
A: We are right now receiving investment on the infrastructure for CPEC which is the phase one. We are going to entre phase two which is the construction of the Special Economic Zone (SEZ). In those zones there will be industries with tax holiday benefits and advantages for setting up industries. The phase one is all by IT companies, hence, they would benefit. Now second phase SEZ would be power projects , gas etc. It’s happening now. It would be completed end of this year.
It’s the same scenario in Sri Lanka and we have also set up the SEZ here and the port of Hambantota developed by China and still to see results even after four years since given on lease 99 years. In this scenario how will Sri Lanka benefit joining the CPEC?
A: Nobody is telling you to join CPEC. It’s between China and Pakistan
But Khan invited Sri Lanka to join CPEC?
A: He invited because due to CPEC there are the other opportunities and we are willing to share those opportunities. Profits from our part of the world and rate of returns are excellent. We don’t want to rely on smaller profits anymore. Sri Lanka is also offering good opportunities and if contacts established between both countries, it will be business. At the Colombo conference your trade and commerce official said Sri Lanka can take cricket as a common factor and play cricket at all levels, have student exchange programmes, we can have inter-school cricket with Pakistan youth teams. We are both thinking of a new level of business practices and both the leaders are vibrant who want manufacturing, reduce imports and boost cricket.
Even former premier of Pakistan Nawaz Sheriff came with a business delegation but it never took off as expected. How will it be with Premier Khan?
A: I am optimistic because Premier Khan is a very different kind of a person. He came to politics to alleviate poverty. He is performing well and we cannot bring results overnight as we remained a poor country for almost 74 years or so. The direction has been set.
In Pakistan, are Chinese investments seen as bearing no fruits but getting the country into great debt. What have you to say?
A: There are solutions for every problem. Our previous government made big blunders. They made agreements with the independent power producers. It’s not only with Chinese; we have had deals in the past that were not welcoming. That energy company promised great returns but those returns quoted were phenomenally high in US dollars and at that time the dollar was some Rs. 100 and now it’s above 150 rupees. So, the government had to pay whatever the previous government had to pay in return in US dollar terms. So, we ended up paying those debts. Majority was locals and some foreign investors landed us in debt payments. Not only the Chinese but we are entitled to settle loans taken from others. Our government is now negotiating with each of those public and private partners
What about Chinese debts are you renegotiating with them?
A: Those debts are not due as yet. Those are long term loans. Our circumstances are different of that of Sri Lanka. We have a different relationship with China. I will never believe China trapped us in debt. Personally, I don’t believe that China can take us on a ride because Pakistanis cannot be trapped either. Not under Premier Khan’s government. The previous government was not straight. They took money out of every deal.
How do you see China as the future partner supporting South Asian regions?
A: China is economically grown. They have risen to this position with hard work. Pakistan’s interest is to learn from China how they alleviated poverty and Pakistan’s is priority is that.
Sri Lanka is strategically located and as it is your visit here. How can Pakistan make use of Sri Lanka besides those industrial benefits?
A: Sri Lankans are good in promoting the tourism industry. We are babies in this field. We would like to learn the best tourism practices. Sri Lanka can have joint ventures with Pakistani travel companies.
How about the Ceylon Tea market in Pakistan?
A: I think, taste wise, Kenya tea has taken over.
It’s a minus point right?
A: Yes. Ceylon Tea needs marketing. Sorry, Sri Lanka has not done it lately.
Is our tea costly there?
A: I am not sure of this. But when it comes to tea, cost is not that important to us but the taste is very important. The Kenyan brand is highly in demand in Pakistan.
But Pakistan was one of the leading countries buying our tea earlier. What happened?
A: It is available but 30 per cent Ceylon tea is consumed whereas 70 per cent of Kenyan brand is there in the market and Pakistan is the top consumers of tea in the world because we love tasty tea. I attended a tea seminar and all those had a debate on Ceylon tea’s flavor which they said they are working on it. A similar tea quality that would match the Kenyan tea quality is the need and they assured they would work on it.
Pic by Akila Jayawardana