Posted at 11:01 AM
U.S. Secretary of Commerce Penny Pritzker today opened the third U.S.-Pakistan Business Opportunities Conference, an event intended to engage the private sectors from both the United States and Pakistan, strengthen business-to-business ties, and boost bilateral trade and investment.
Addressing an audience of more than 400 people, many attending from overseas, the Secretary applauded the work being done by the Pakistani and American private sector companies represented. She commended them for engaging with government agencies seeking to improve Pakistan’s business and investment climate and called on them to continue their efforts to expand trade and investment between Pakistan and the United States.
President Obama and Secretary Pritzker believe that increased commercial engagement between nations can lead to more effective solutions to global problems, and a more peaceful, prosperous, and secure planet. At the Department of Commerce, this work is called “commercial diplomacy.”
In addition to calling for more trade and investment, the Secretary also urged the Government of Pakistan to improve the business climate by implementing measures to increase transparency, enforce contracts, and streamline bureaucracy. Secretary Pritzker also expressed her hope that the private sector in Pakistan would create greater opportunities for women in the workplace across all sectors of the economy.
Remarks As Prepared for Delivery
Minister Dar, Minister Dastgir, Ambassador Olson, Ambassador Feldman.
Good morning. It is an honor to open the third U.S.-Pakistan Business Opportunities Conference and the first to take place here in Pakistan.
The friendship between our two countries is strong, and includes an untiring commitment to defeating terrorism and to build prosperity for our citizens. I was pleased to stand beside Prime Minister Sharif yesterday to underscore this point.
In addition to the work we do as government leaders, American businesses have a critical role to play as we seek to deepen our economic partnerships around the world and here in Pakistan.
President Obama and I both believe that increased commercial engagement between nations can lead to more effective solutions to global problems and a more peaceful, prosperous and secure planet. At the U.S. Commerce Department, which I am proud to lead, we call this work “commercial diplomacy,” and it is one of our central priorities. It is also what the next few days are all about.
Today, I would like to focus my remarks on three topics that form the basis of the U.S.-Pakistan Economic Partnership week: the ongoing strength of our bilateral relationship; the importance of placing our business communities at the center of our partnership going forward; and, finally, the necessity of Pakistan continuing to take tough steps toward deeper economic reform, which will create an environment less dependent on aid and more ripe for increased trade, investment and economic growth.
Let me start by touching on the strength of our bilateral relationship. The United States and Pakistan share a commitment to defeating terrorism, strengthening democracy, and spurring prosperity for our people.
At a fundamental level, it is in the interests of the United States for Pakistan to be a stable, peaceful, tolerant nation, with a growing economy, at peace with itself and its neighbors. Obviously, we share these objectives and the Prime Minister reinforced that point yesterday.
And while our broader relationship sometimes faces challenges, our strategic partnership is as critical as ever. For this week our focus is to deepen our ties of trade and investment. Secretary Kerry made clear during his visit eight weeks ago that we are entering an era with economics at the center of the U.S.-Pakistan relationship.
The model for our economic assistance to Pakistan is evolving. We are moving past traditional aid toward initiatives that bring the private sector into the equation. For example: our Overseas Private Investment Corporation is helping finance five wind power projects in the Sindh province, using General Electric wind turbines; USAID-sponsored programs in the energy sector have added 1,500 megawatts of power to Pakistan’s electricity generation and distribution system. And, at Port Qasim in Karachi, American diplomats connected Houston-based Excelerate Energy with Pakistan-based Engro to equip and operate Pakistan’s first LNG import terminal.
These are a few examples of how the U.S. private sector is working as a partner in Pakistan. We know that relationships between states based solely on interactions between governments are susceptible to instability, disruption, and being defined by the crisis of the moment. Conversely, relationships with a strong commercial foundation are mutually beneficial and more stable.
That is the type of future we want to build with Pakistan. We have a strong basis for progress. This is the sixth largest country by population in the world, with almost 200 million potential customers. It is the fastest urbanizing country in South Asia, with a growing fiber optic infrastructure. Nearly 65 percent of Pakistanis are under the age of 25.
Further, the United States is Pakistan's largest export market and your largest source of foreign direct investment. Over the last seven years, American companies have invested more than $1.3 billion in Pakistan.
One U.S. firm represented here today, Coca Cola Beverages Pakistan, recently announced plans to expand its operations by as much as 50 percent over the next three years, and will open new production facilities near Karachi, Multan, and Islamabad.
At the same time, Coca Cola has opened new, locally-operated water purification plants across this country; run a micro-finance program for women entrepreneurs; and worked with local farmers to help their goods make it to market.
Coca Cola is just one example of an American company that is doing business here and wants to be a long-term, constructive partner in communities across Pakistan. We want to see additional success stories like this one. All of us in this room are challenged to answer the question of how to realize the full potential of our economic relationship.
For many companies, the hesitation to enter the Pakistani market comes down to the basics: persistent security concerns are felt by millions in this country every day – and the risk for business is still perceived as too great. The entire world was horrified by the terrible events of December 16. We are encouraged by the security operations now underway, and support efforts from all parts of Pakistani society to eliminate the space for violent extremism.
I know that combating terrorism and building safer communities is a core priority for Prime Minister Sharif and the armed forces. Prime Minister Sharif has been a strong ally in our fight against terrorism and your people have made great sacrifices alongside us. We will work shoulder-to-shoulder with you to address the security challenges facing Pakistan.
As that fight continues, we can, and should, also focus attention on developing the U.S.-Pakistan economic partnership. Beyond security concerns, many companies have reported to us that bureaucratic procedures in Pakistan can be complex, arbitrary, and unpredictable. Even with local partners, foreign firms find that contracts and applications languish for weeks or months.
According to the World Bank's "Doing Business 2015" survey, Pakistan is in the bottom 50 percent globally when it comes to the ease of starting a business, dealing with construction permits, regular access to electricity, property registration, access to finance, tax administration, and contract enforcement. I know that no issue is as frustrating to a U.S. business as inconsistent and unfair taxation.
A lax commitment to fair and consistent tax collection is not only a problem for foreign investors; it creates a serious fiscal problem for the Pakistani government as well. A 10 percent tax to GDP ratio means there is not enough money to invest in education and healthcare; roads and bridges; power plants and new sources of fuel.
The contest for global capital is increasingly competitive, and if these issues are not improved, businesses will seek opportunities in other markets. Improving the business climate must be a priority for the Government of Pakistan; it is both good business and good government.
Another area of severe challenge is the energy sector. The World Bank estimates that Pakistan will need $3-4 billion in new investment per year in each of the next five years to maintain and improve the current energy infrastructure. An additional 10,000 megawatts of generation capacity is needed to meet demand, which is projected to double by 2030. Addressing this challenge is a short term necessity, a core development objective for Pakistan’s long term growth and a central focus for Prime Minister Sharif. As I stated earlier, the United States has prioritized energy sector assistance.
I want to close by focusing on an area of great potential for our economic partnership: entrepreneurship. As an entrepreneur myself who created five businesses from scratch, I know that starting a company, developing a business plan, finding capital, accessing talent, understanding the demands of the market, attracting customers can be both daunting, and exhilarating. The good news is that today Pakistan is outpacing many other developing countries in fostering new business ideas and in building home-grown infrastructure for entrepreneurship.
Let me highlight a few examples of how the U.S. public and private sectors are collaborating with the Pakistani government and industry to support entrepreneurs across the country.
Earlier this year, Google, Samsung, the Pakistani Software Houses Association, and the U.S. Consulate Karachi teamed up to launch NEST I/O , short for “innovation in the open.” This technology incubator will link young Pakistani entrepreneurs with other entrepreneurs at 28 Google-sponsored hubs around the world. This type of collaboration will promote global innovation here in Pakistan.
In addition, the U.S. Embassy and The Indus Entrepreneurs, located here in Islamabad, recently opened Pakistan’s second annual StartUp Cup competition. This seven-month business mentoring program trains aspiring Pakistani entrepreneurs to develop business models, find customers, and bring their products to market.
But even as Pakistani entrepreneurs gain more opportunities and assistance overall, a major potential driver of Pakistani business formation is being left largely behind: female entrepreneurs. Too many barriers remain to full economic inclusion for women. The World Economic Forum ranked Pakistan among the last two countries in the world for women’s economic participation and opportunity.
I know this will be a topic of one of the sessions tomorrow, but we must make women’s empowerment a priority each and every day. Women make up half of Pakistan’s population, yet represent just 25 percent of the workforce and own only 2 percent of the country’s businesses. For Pakistan to succeed in the global economy, those numbers must change and change fast.
Keep in mind that, when women entrepreneurs take risks and succeed, societies change for the better. Expectations change, not only for other women, but for men and children, too. It becomes easier to accept the idea of a woman as a family’s breadwinner, the head of a household, a community leader, or a head of state.
When women entrepreneurs thrive, economies grow. In developing nations, there are as many as 10 million small and medium sized enterprises owned by women; all of them creating jobs, driving consumer spending, and injecting growth into their communities. When women entrepreneurs flourish, families benefit. Women tend to spend more of their money on their children’s health and education, which leads to a more skilled, more productive generation of workers.
That is why the State Department and American University established the U.S.-Pakistan Women’s Council in 2012, in partnership with Pakistani counterparts and the Organization of Pakistani Entrepreneurs of North America. This public-private partnership is bringing corporations, universities, and other stakeholders to the table to strengthen the hand of women in Pakistan’s economy.
I am pleased to report that just a few weeks ago Ambassador Olson inaugurated another great new effort to increase the number of female entrepreneurs in Pakistan. Known as WECREATE, this Islamabad-based center will provide training, mentoring and networking opportunities to budding female entrepreneurs.
We hope to make this center a model for women’s economic empowerment, not only in Pakistan but across this region. The bottom line is that any nation’s economy can only reach its full potential when it taps into 100 percent of its talent.
Nearly six years ago, President Obama reminded us that “the people of Pakistan want the same things that we want: an end to terror, access to basic services, the opportunity to live their dreams, and the security that can come only with the rule of law.” Those aspirations remain true today.
Imagine a Pakistan where women have equal access to mentorship, guidance, and capital. Imagine a Pakistan where a small business owner can operate consistently because they have reliable power, instead of rolling blackouts. Imagine a Pakistan where young people who graduate from school can find well-paying jobs that allow them to provide for their families. Imagine a Pakistan with an economy that creates jobs, expands the middle class, raises living standards, and extends the blessings of prosperity to all of Pakistan’s people.
We should not just imagine this future. We should build it together. Thank you.