Mr. Donald Nicholson, President AMCHAM,
Dr. Tatiana Okunskaya, Executive Director,
Excellencies,
Distinguished Members ofAMCHAM,
Distinguished Invitees,

1. Allow me at the outset to express my profound thanks for your invitation to address this important forum. I consider it a great honour to share some of my thoughts with you on Pakistan's trade and economic relations with the Republic of Uzbekistan. My presentation is based on official facts and figures. I will gladly answer any questions that you may wish to ask mc at the end of my talk.

2. Let mc for a while take you to the past. Pakistan was among the first countries to establish diplomatic relations with Uzbekistan in August 1992. Pakistan International Airlines (PIA) was the first non-CIS airline to fly between Pakistan and Uzbekistan.

3.  Soon after Uzbekistan's independence, a Trade & Economic Cooperation Agreement was signed between the two countries in 1992. The agreement envisaged cooperation in a wide range of areas including industry, oil & gas, mining, communications, ports & shipping, science & technology, agriculture, trade, sports, tourism and culture. Although progress was limited on any of the understandings reached between the two sides, still bilateral trade between Pakistan and Uzbekistan grew rapidly during the 90s.

4. Pakistan's exports to Uzbekistan registered an impressive increase during 1992-96. In the year 95-96 the export figure rose to USS43.36 million. In 1998-99 Uzbekistan's exports to Pakistan were worth US$64 million. However, the rising trend did not continue for long as the exports gradually declined to USS2.8 million in 2004-2005. In
2004-2005 the total volume of trade was 14 million USS. The decline was caused mainly by restrictions on convertibility of currency and repatriation of import sale proceeds, introduced in the latter half of 1996. The state of bilateral political relations, affected by the situation in Afghanistan was the other major cause.

5.  In the recent years, the major items of Pakistan's exports to Uzbekistan have been: medical & pharmaceutical products, sports goods, leather goods, cereals, cotton fabric and apparel etc. Uzbek exports comprise raw cotton, synthetic textile fibre, iron & steel, fertilizers and chemical materials & products.

6.  You are all aware that the above-referred restrictions on trade introduced by the Uzbek government in 1996 were relaxed towards the end of 2003. Convertibility was allowed and companies were permitted to remit foreign exchange for their imports. During the last two years, therefore, the business environment has shown signs of improvement. However, of late there have been occasional complaints of non-availability of foreign exchange for imports.

7.  During the past decade, Pak-Uzbek commercial relations have also been negatively affected by the rather strict Uzbek visa regime. Business visits from both sides during the last many years have therefore been minimal. Recently there has been some relaxation in visas from the Uzbek side. At Pakistan's request, the Uzbek government is in the process of preparing a draft visa MoU. On the contrary obtaining a visa by Uzbek nationals intending to visit Pakistan is quite easy. Moreover since July this year, acting unilaterally, the government of Pakistan has included Uzbekistan in the list of countries whose nationals can get a business visa on arrival in Pakistan.

8.  In March 2005, President General Pcrvcz Musharraf paid an official visit to Tashkent and held wide ranging discussions with President Karimov on a large number of issues of mutual interest. Promotion of trade and economic relations was high on the agenda. On that occasion, the land-locked Uzbekistan was offered to make use of the three Pakistani ports including the new one at Gwadar for trade purposes. May 1 highlight here that Pakistani ports in the south of the country offer the shortest land route to Uzbekistan a distance that ranges between 2,528 km to 2,789 km. Two agreements, one on cooperation in the fight against terrorism and the other on culture were signed. President Musharrafs visit gave the much-needed impetus to bilateral relations.

9. Pakistan and Uzbekistan Joint Commission on Trade, Economic, Scientific and Technological Cooperation was set up in 1993. The Commission did not meet for more than a decade after its first Session that year. During President Musharrafs visit to Uzbekistan in March 2005, it was decided that the Joint Commission be revived. In pursuance of the decision, the 2nd Session of the Commission was held in Tashkent on 28-30 December 2005. The Commission noted the need for enhanced economic and scientific cooperation and decided that the following measures would be taken to achieve that end:

• The sides will consider entering into an 'Agreement on Traffic in Transit' to facilitate transit trade and transportation between the two countries.

• The sides will review their visa regimes with a view to easing restrictions on visits of each other's nationals. A MoU will be signed, the draft for which will be prepared by the Uzbek side.

• Pakistan side would provide an export credit of $5 million to the Uzbek side for purchase of machinery/equipment and engineering goods from Pakistan. (The credit has been formally offered to the Uzbek side. Their response is awaited)

• A Joint Committee on Science and Technology will be set up.

• A MoU will be signed between the two countries for increasing cooperation in food & agriculture. (This MoU has been signed).

• Details of the Cultural Programme for 2005-09, under the Cultural Agreement 2005 will be exchanged through diplomatic channels.

• Correspondent relations will be established between commercial banks of the two countries. (These have been established).

• A delegation of Trading Corporation of Pakistan will visit Uzbekistan to discuss purchase of cotton. (The visit took place from 6-12 February 2006)

• Both countries will hold single country exhibitions in each other's country.

• Both countries will encourage visits of business delegations.

• Uzbek side will consider Pakistan's offer for import of LNG, while the Pakistan side would consider the offer of sale of IL76 Aircraft by Uzbekistan.

10. In May this year, President Islam Karimov paid an official visit to Pakistan. Again the two sides discussed a large number of issues and expressed their determination lo expand trade and economic ties, in particular. On this occasion, 9 agreements/MoUs related to Small and Private Enterprises (SPEs), Agriculture, Plant Quarantine. Trade, Economic and Investment, Customs, Chambers, and Banking were signed. The momentum set by President Musharraf's visit was accelerated further by President Karimov's visit. A quick dividend of these developments was the resumption of flights by Uzbekistan Airways on the Tashkent-Lahore sector w.e.f 17 July this year. As a consequence of these developments, the frequency of exchange of delegations during the past one year has shown an unprecedented increase.

11. The full potential of Pakistan-Uzbekistan trade can only be achieved once the land route through Afghanistan becomes fully operational. Road conditions as well as security situation in Afghanistan are gradually improving and commercial traffic from Pakistan is already plying up to the northern most points of the country. What we need now is a transit transportation arrangement with Uzbekistan, which could later be extended, to other countries in the region. A draft agreement to this effect has already been worked out and is under consideration by the two sides.

12.  PakislanUzbekistan relations in any field are far below Iheir potential. Its optimum realization depends a great deal on the will of the two governments and their private sectors. I believe strongly that business is businessmen's job. The governments are there as regulatory bodies. The agreements recently signed by the two countries provide a solid foundation for cementing further close bilateral tics. However, these agreements would remain ineffective unless implemented in a timely manner. Since the leaders of the two countries have underlined their commitment to bring the bilateral relations to a higher level, unless something dramatic happens in an adverse sense, a gradual expansion in relations can be hoped for over a period of time. This provides me with an opportunity to conclude my talk on an optimistic note.

13. Separately from the trade business, I wish to avail myself of this opportunity to express my profound thanks to the AMCHAM members for their generous donation towards Pakistan President's Relief Fund following the devastating earthquake in Pakistan in October last year. This noble gesture was appreciated at all levels.

14.  Thank you for listening to me patiently. I am now open to questions.