PAGE Blog Business Weekly Magazine
Trade figures of last ten years reveal that Saudi Arabia is one of the largest trade partners of Pakistan. Besides bilateral trade between the two countries, Pakistan is the major recipient of workers remittances estimated over $4.1 billion in 2013 while the trend of home remittances indicate further increase in remittances from Saudi Arabia.
It is important to note that the new democratic government in Pakistan has much better understanding with Saudi government, which is reflected in the financial support by Saudi leadership as well as large scale investment is an important factor indicating increasing cooperation between the two countries.
Saudi Arabia is the 10th top export and third top import partner of Pakistan depicting 3 percent and 10 percent share in our total exports and imports respectively. Total trade volume between these two brotherly Muslim countries was US$1,382 billion in 2003-04 that has reached to $4,475 million in 2012-13. As far as bilateral trade is concerned the share of Pakistani exports in Saudi Arabia’s total imports accounts for only 2.06 percent whereas share of Saudi exports in total import bill of Pakistan has amounted to 9.87 percent. In the context of these statistics, Pak-Saudi business counterparts need to strive seriously for bringing bilateral trade volume to up to $10 billion. And this target may only be achieved if Saudi businessmen seek more imports from Pakistan. This will not only help augmenting trade relation but also help in bringing down the trade deficit of Pakistan.
|
Trade between Pakistan and Saudi Arabia |
||||||||
|---|---|---|---|---|---|---|---|---|
|
(Million US $) |
||||||||
| Item |
Export |
Import |
Total Trade |
Trade Surplus/Deficit |
Total export from Pakistan |
Share in export (%) |
Total import in Pakistan |
Share in import (%) |
|
2003-04 |
365 |
1,017 |
1,382 |
(652) |
12,396 |
2.94 |
12,396 |
8.20 |
|
2004-05 |
359 |
1,665 |
2,025 |
(1,306) |
14,481 |
2.48 |
18,996 |
8.77 |
|
2005-06 |
322 |
2,619 |
2,942 |
(2,297) |
16,572 |
1.95 |
24,894 |
10.52 |
|
2006-07 |
291 |
3,257 |
3,548 |
(2,966) |
17,301 |
1.68 |
26,873 |
12.12 |
|
2007-08 |
338 |
3,610 |
3,948 |
(3,272) |
20,448 |
1.65 |
35,282 |
10.23 |
|
2008-09 |
415 |
3,545 |
3,959 |
(3,130) |
19,125 |
2.17 |
31,665 |
11.19 |
|
2009-10 |
400 |
3,645 |
4,044 |
(3,245) |
19,680 |
2.03 |
31,132 |
11.71 |
|
2010-11 |
426 |
4,451 |
4,877 |
(4,025) |
25,369 |
1.68 |
35,796 |
12.43 |
|
2011-12 |
456 |
4,796 |
5,252 |
(4,340) |
24,718 |
1.84 |
40,371 |
11.88 |
|
2012-13 |
512 |
3,963 |
4,475 |
(3,452) |
24,802 |
2.06 |
40,157 |
9.87 |
| Source: State Bank of Pakistan | ||||||||
Major exporting items of Pakistan to Saudi Arabia
Articles of apparel/cloth, made-up textile articles, rags, rice, cotton yarn & woven fabrics and foot wear have been the most important export items of Pakistan to Saudi Arabia.
|
Product Label |
Pakistan’s Exports From Saudi Arabia |
||||
|---|---|---|---|---|---|
|
value in 2008 |
value in 2009 | value in 2010 | value in 2011 | value in 2012 | |
| All products |
441 |
425 |
409 |
420 |
455 |
| Rice |
136 |
126 |
137 |
95 |
99 |
| Other made textile articles, sets, worn clothing etc |
64 |
82 |
50 |
64 |
58 |
| Meat and edible meat offal |
17 |
23 |
38 |
42 |
54 |
| Fish, crustaceans, molluscs, aquatic invertebrates nes |
13 |
14 |
20 |
17 |
22 |
| Source: International Trade Center (Trade Map) | |||||
After textiles, rice is the most important item of export from Pakistan to Saudi Arabia. However, Pakistan needs to increase its export of par-boiled rice to Saudi Arabia, as it is the preferred type of rice in Saudi Arabia. Besides these, the export volume of spices, cotton American (staple), sports goods, newspapers, surgical instruments sugar, cane and refined is too meager to mentionable. Saudi Arabia should import these commodities in larger quantity. As per sector-wise details available, during the outgoing financial year, export of bedwear to Saudi Arabia from Pakistan went up by 8 percent, garments 28 percent, synthetic textiles 29 percent, cotton fabrics percent, tents and canvas 12 percent, towels 44 percent and even rice exports to the Kingdom grew.
Major importing items from Saudi Arabia to Pakistan
Petroleum is the most important import commodity from Saudi Arabia, which accounts for more than 80% of total Saudi exports to Pakistan. On account of this single commodity the import bill of Pakistan increase which causes huge deficit to Pakistan. Diversifying export items to Saudi Arabia can reduce trade deficit.
|
In US$ Million |
|||||
|---|---|---|---|---|---|
| Product Label |
Pakistan’s Imports From Saudi Arabia |
||||
|
value in 2008 |
value in 2009 |
value in 2010 |
value in 2011 |
value in 2012 |
|
| All products |
5,955 |
3,500 |
3,838 |
4,668 |
4,284 |
| Mineral fuels, oils, distillation products, etc |
5,051 |
2,883 |
2,953 |
3,686 |
3,346 |
| Plastics and articles thereof |
256 |
257 |
413 |
452 |
407 |
| Organic chemicals |
225 |
152 |
231 |
315 |
334 |
| Fertilizers |
251 |
85 |
124 |
82 |
78 |
| Source: International Trade Center (Trade Map) | |||||
Worker remittances from Saudi Arabia
Workers Remittances increased from $565 million in 2003-04 to US$4,104.73 million in 2012-13, which shows an increase multiple of 8 during last 10 years. These remittances are of great importance for Pakistan’s economy as a non-debt creating source of financing the trade deficit. Furthermore, it also plays an important role in poverty reduction directly and through its spill over effects.
|
Worker remittances from Saudi Arabia |
FY04 |
FY05 |
FY06 |
FY07 |
FY08 |
|
Value (Million US $) |
565 |
627 |
750.44 |
1,023.56 |
1,251.32 |
|
FY09 |
FY-10 |
FY-11 |
FY-12 |
FY-13 |
|
|
1,559.56 |
1,917.66 |
2,670.07 |
3,687.00 |
4,104.73 |
|
| Source: State Bank of Pakistan | |||||
