Pakistan, Nordic region must sign FTA to reduce tax burden, promote trade: Business summit

ISLAMABAD: Pakistan and Nordic region (Northern Europe and the North Atlantic) will have to sign Free Trade Agreement (FTA) for reducing tax burden as representatives of over 40 companies of Nordic region have termed higher taxation rates as major impediment in the way for promoting economic ties.

“There are two companies who have invested $300 million here in Pakistan. In the last visit of PM Nawaz Sharif to Norway, one company signed 150MW solar power plant in Pakistan so we need to put in place right kind of incentives to promote economic ties and FTA can pave the way for reducing tax rates for mutual benefits,” it was crux of the discussion in Nordic Business Summit organised here on Tuesday.

Wille Eerola, Chairman of the Summit, said that if Finland’s exports to Pakistan could triple in couple of years so Islamabad’s exports to Finland could also increase up to maximum level.  

A business delegation comprising representatives of over 40 companies from the Nordic region conjoined in Islamabad on Tuesday for the Nordic Pakistan Business Summit. This was the third such summit held after the first two - named Finland-Pakistan Business Summit - were conducted in Islamabad in 2014 and 2015.

Federal Minister for Commerce Khurram Dastgir Khan said on this occasion that Pakistan came back on the radar screen of world’s investors who now considered it as safe place for business, trade and investment. He enumerated the five good news emanating from Pakistan, which are, Pakistan has become more peaceful; public finances have stabilised; the energy crisis has lessened a great deal and is in sight of being wiped out for good; Pakistan is getting reconnected to the business and political world and Pakistani nation has proved resilient in face of worst form of terrorism.The minister was of the view that all these positive developments are a recipe for profitable business.

“This year’s business summit was one of the biggest business promotional events ever done in Pakistan,” said Wille Eerola, Chairman of the Summit. “The idea was not just to take companies from countries like Finland, Sweden, Norway or Iceland to Pakistan but also to give Pakistani companies the opportunity to enter the very lucrative Nordic market.

“I believe both sides have the same challenge: Nordic companies don’t understand the dynamics and opportunities of the Pakistani market while the Pakistani companies don’t understand the purchasing power of the common Nordic market with only 26 million people. This summit aimed at building that bridge between companies of both regions.”

The summit discussed businesses in the sustainable energy, education and healthcare sectors – three of the many areas where experience and knowledge of the Nordic companies can benefit Pakistan.

The Nordic region is a world-leader in producing fossil-free energy, eg the consumption of wind energy in Denmark is the highest per person in the world. Moreover, Norway is known of its oil reserves, over 99% of the electricity production in mainland Norway is covered by hydro-power plants. Of all primary energy consumed in Finland around 25% is covered with renewable sources: one of the highest figures among all industrialised nations and the third highest in the EU. The world’s largest bio power plant with a capacity of 265 MW is also situated in Finland.

“Collaborations between companies of both the regions in the energy sector could go a long way in solving Pakistan’s energy crisis. The experience these Nordic companies will bring to Pakistan can help the country establish modern renewable energy production,” he said.

The Nordic region is known for its education standards, economic competitiveness, quality of life and human development. They boast a very high purchasing power in an area that is home to approximately 26 million people.

The GDP of the Nordic region is approximately $43,000 per capita, placing the country  among the top-25 countries in the world by GDP. This lays splendid platforms for Pakistani businesses to establish themselves in the region, he added.