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Denmark has a diverse, mixed economy, but one that relies almost entirely on human resources, as there are few mineral resources available, except mature oil and gas wells in the North Sea. Denmark is one of the most trade dispose economies in the Europe. Denmark is a huge exporter of food and energy and has a very comfortable balance of payments surplus as well. Denmark is also member of the EU. Roughly 25,000 Pakistanis live and work in Denmark, making them the country’s fifth-largest non-Western community. Pakistani immigrants have reasonable seats on local parliaments and councils, the second-highest number of any immigrant group after United Kingdom.
Denmark also helped Pakistan in the time of crisis. For instance, Denmark supported Pakistan in their 2010 flood crisis by donating 11 million euro in relief efforts and another 22 million euro in further development aid. Denmark contributed to the second highest amount of any European country after the United Kingdom. But, both countries can cross much more milestones by taking their relationship ahead. Both; Denmark and Islamabad can work closely to enhance the trade. It’s a very good opportunity for Danish companies to invest in the growing market of Pakistan. The potential of tourism department alongside the billions of dollars investment done by China already lifted the game for Pakistan. Danish companies could bridge the gap.
Pakistan and Denmark have agreed to promote bilateral economic cooperation in various fields.
Denmark and Pakistan enjoy healthy and productive relations with focus on magnifying bilateral trade and investment along with political, economic and social development cooperation. There is also a bilateral investment treaty (BIT) between Pakistan and Denmark since July 1996 to promote investment between the two countries. The bilateral trade relations between Pakistan and Denmark are noteworthy and are based on the trade of various products. In Fiscal Year 2013-14, the goods exported by Pakistan to Denmark were recorded at $ 123.45Mn while Pakistan’s imports from Denmark were worth $ 55.0Mn. EU is Pakistan’s largest export market representing 35% of exports. But Denmark accounted only for 2% of total EU imports from Pakistan in 2016 which stood at $0.14 Bn. The trade balance is in the favor of Pakistan. However, the volume of trade needs to be increased by identifying various potential fields of economic cooperation.
Pakistan and Denmark have agreed to promote bilateral economic cooperation in various fields. This was agreed on 2nd July 2020 via video link between Pakistan’s Foreign Minister Makhdoom Shah Mahmood Qureshi and his Danish counterpart Jeppe Kofod. There was a huge need to fill the vacuum and facilitate the companies to invest in potential markets of strategically important country as Pakistan.
In this regard, the Royal Danish Embassy established a Trade Council at the Danish Embassy in December 2013. Royal Danish Embassy also assists companies to increase trade between Denmark and Pakistan. Since the establishment of a trade council, there have been increasing interests from Danish companies in the Pakistani market, of which several large-cap and small-cap companies utilize the Embassy’s support.
Pakistan should focus on identifying new fields of cooperation for enhancing bilateral trade and investment with Denmark.
Commodities exported by Pakistan to Denmark includes textiles, cotton, apparel, leather products, toys, games, sport requisites, articles of apparel etc. Whereas imports by Pakistan include pharmaceuticals material, ships, boats, machinery, boilers, chemicals, electrical, electronic equipment, iron and steel etc. There is still huge potential for enhancing bilateral trade relation between Pakistan and Denmark.
Danish companies hold expertise in the energy sector particularly wind energy and biomass-to-energy which can be utilized by Pakistan for resolving the energy shortfall issue. Pakistan can eye for medium oils, preparations of petroleum or bituminous minerals, data-processing machines, automatic portable machines, chemical products and preparations of the chemical or allied industries etc. Denmark may look into importing several items of its interest from Pakistan like petroleum oils and oils obtained from bituminous minerals, indentured ethyl alcohol, medicaments consisting of mixed or unmixed products for therapeutic or prophylactic purposes, meat, fish, footwear, fruits etc.
Pakistan should focus on identifying new fields of cooperation for enhancing bilateral trade and investment with Denmark. Pakistan and Denmark have strong potential for joint ventures and investment in the agriculture and dairy sectors. Both countries can expand cooperation by capitalizing on the low cost labor and abundant raw material availability on Pakistani side and rich technical know-how and modern technology from the Danish side.
A contributed article by Ali Asad Sabir
