Despite COVID-19 propelled lockdown and supply chain disruptions, Pakistan has fared quite well by registering visible growth in Italian market in FY 2019-20, said the Ambassador of Pakistan to Italy His Excellency Jauhar Saleem while addressing Pakistani and Italian media. Italy is the 8th largest economy of the world with a $2 trillion GDP and 3rdlargest in the European Union (EU) after Germany and France. It’s also Pakistan`s 9thtop export destination and hosts the largest Pakistani diaspora in the EU.
The Southern European country is facing hard times due to the economic effects of the pandemic. The International Monetary Fund (IMF) projected 9% to 11% contraction in Italian economy whereas the Italian Central Bank projected 9% to 13% decline in Italian GDP, this year.
Ambassador Saleem stated that last year Pakistan had trade deficit of $164 million with Italy. This year (FY2019-20), despite COVID-19 crisis, Pakistan achieved a trade surplus of $210 million. So, the balance of trade is in Pakistan`s favour now. In FY 2019-20, Pakistan`s exports to Italy are $731 million and imports are $521 million. Its major exports to Italy are textile, leather, rice, ethanol etc. The country is a market leader in rice and holds 38% share in Italian rice market. It is to be noted that $62 million worth of rice were exported (Thailand holds 12% share with $19 million export while India holds 10% share with $17 million).
While talking about Italian investment in Pakistan in June 2020, Ambassador Saleem mentioned that it increased 45% against the corresponding period. In value terms, it was $51.9 million last year, and it has been increased to $56.4 million in FY 2019-20. Italian FDI came mainly in energy, pharma, chemicals and IT etc. Major investment came in energy sector with plans on card to invest in renewable energy sector of Pakistan by Italian companies. The Embassy of Pakistan, Rome is facilitating these new investment projects.
Ambassador Saleem further stated that Italy has become the largest contributor from the EU in home remittances to Pakistan. In FY 2019-20, it registered 29% growth which is far higher than the national growth in remittances. Pakistani workers contributed $142.9 million in home remittances in FY 2019-20($111 million in 2018-19). The envoy added that the embassy took a number of initiatives so that the Pakistani labour force stays in Italy even during the lockdown instead of returning to Pakistan. This strategy has delivered and with the improving market conditions, Pakistanis are back to work and workers remittances have registered 77% growth in June 2020.
While answering to a question, Ambassador Saleem informed that Italian government has decided to temporarily regularise undocumented migrants working in the agricultural sector or as domestic helpers, to fill key jobs and allow workers health coverage. Pakistani undocumented workers are among the main beneficiaries of this scheme. The embassy is facilitating Pakistanis in completion of their required documentation so they can benefit from this scheme. He added that the embassy stood functional even during the now-lifted lockdown period. It was further stated that Pakistan is enhancing areas of bilateral cooperation. Currently, Italy is providing technical assistance in textiles, leather and marble sectors. Pakistan is working to expanding it to dairy and livestock, olives and olive products, plastics, processed food and construction sector. The Pakistan-Italy Joint Economic Commission, a forum for bilateral economic engagement, is expected to meet in Rome during the last quarter of this year.
