Situated as bridge between Asia and the Middle East with a population of about 180 million, Pakistan has a number of attributes that make it an attractive market for multinational firms; a growing middle class and a young population, English serving as a lingua franca of the business community, and an important services sector that contributes 60% of the GDP. The World Bank’s 2013 doing business report, which surveys the ease of doing business in international markets, ranks Pakistan at 107th in the 185 economies it has surveyed. By contrast, competitors in the region such as China and India ranked 91 and 132 respectively.
With two-way trade between them at around $5.1 billion in 2012, the United States and Pakistan have a long-standing and strong economic and commercial relationship. Pakistan’s largest trading partner and top source of foreign direct investment is the United States. However, Pakistan stands as a modest market for the United States and ranks at the 59th largest purchaser of US goods in 2012 with a value of $1.53 billion. The United States was Pakistan’s largest market in 2012 with almost 16% of its total exports. The United States is providing Pakistan and economic assistance over a five-year period that is work some $7.5 billion. Together with other bilateral and multilateral commitments, this assistance continues to provide a solid funding base for a wide array of soft and hard infrastructure development which is of potential interest to US firms.
With some 65 firms registered with the ABC, American businesses have a very strong presence in Pakistan. Apart from these there are hundreds of local firms representing US companies in the market. These members of ABC have collectively invested over $750 million in Pakistan and the cumulative annual revenue is around $4 billion. These firms also contributed a sizeable amount of the National Treasury every year in the form of direct and indirect taxes.
In spite of security threats and familiar emerging market concerns over IPR, contract enforcement, and governance issues, the Pakistan market offers many attractive trade and investment opportunities. With regard to investment, the market has few restrictions on the movement of capital; no shareholding restrictions (outside of a few sensitive sectors); no technology transfer requirements; and a large and sophisticated entrepreneurial class.