The major indicators of Pakistan and Italy’s bilateral economic relations — trade cooperation and workers remittances — are reflecting extraordinary growth.
Pakistani workers’ remittances from Italy increased by a staggering 92 percent in August 2021 against those in August 2020, making Italy the largest contributor in remittances from the European Union. Keeping in view the growth trend of the last 12 months, Italy could join the so-called ‘Billion Dollar Club/markets for remittances’ for Pakistan, which could help it address its current account gap.
While talking to the media, Pakistan’s Ambassador to Italy, Jauhar Saleem, highlighted some of the main factors that are fueling the unprecedented growth streak in the remittances in the last four quarters. He named the user-friendly financial products of the State Bank of Pakistan like the Roshan Digital Account, the restrictions on cross-border travel due to the pandemic, the favorable exchange rate, the legalization of undocumented Pakistani workers in Italy, Pakistan’s inclusion in the seasonal work visa program in Italy, and the Remittances Promotion Drive of the Pakistani Embassy in Italy as some of the leading elements that are helping remittances grow to record heights.
He stated that Pakistan has been included in Italy’s Seasonal Work Visa Programme for 2022 as well, which will help the country’s semi-skilled workers to go to Italy through legal channels to work in the agriculture and services sectors of the Italian market.
As for Pakistan’s exports to Italy that registered 64 percent growth in August 2021 year-on-year, Ambassador Saleem mentioned that the growth of the exports was mainly led by value-added sectors like garments, leather products, home textiles, and footwear.
Italy is Pakistan’s eighth-largest export market where Pakistan is a market leader in some products such as rice. Pakistan’s share in the supply of Basmati rice to the Italian market has risen to 82 percent, whereas India supplies only 12 percent of it. Despite India’s false claim over the exclusive rights for Basmati rice in the European Union (EU) market, Pakistan is the largest exporter of Basmati not only to Italy but to the entire EU.
The ambassador noted that Pakistan’s exports to Italy reached an all-time high of $786 million during FY 2020-21, and it is endeavoring to have an even better growth figure this year. He added that despite the pandemic-related restrictions, the Pakistani embassy is extending all possible support to Pakistan’s businesses to facilitate their access to the Italian market.
He revealed that a delegation of around 40 Pakistani businessmen from the leather sector will visit Italy next week to meet with Italian buyers and investors, visit state-of-the-art leather manufacturing facilities, and participate in an internationally acclaimed trade fair.
While talking about bilateral investment cooperation, Ambassador Saleem stated that the Italian investment in Pakistan was previously highly concentrated in the hydrocarbon market. The embassy is endeavoring to help build a more diversified investment portfolio from Italy, and has pitched Pakistan’s priority sectors for investment so that the Pakistan-Italy bilateral investment portfolio may have sustainable growth.
Italian companies that are new to the Pakistani market are now investing in different sectors such as food, steel, leather, textile, tourism, IT, electric vehicles, and allied equipment.
Ambassador Saleem appreciated the roles of the Italian government, embassy, and private sector companies in providing technical assistance and technology transfer, particularly in the leather and textile sectors which are of prime importance for Pakistan’s economy in terms of export capacity.