Port of Baltimore bridge collapse rattles supply chains already rocked by troubles in Panama and the Red Sea. The collapse of the Francis Scott Key Bridge has put a spotlight on the Port of Baltimore, one of the busiest harbors in the U.S., which paused shipping and immediately halted all vessel traffic in and out. (The Conversation)

Hong Kong’s freedoms: What China promised and how it’s cracking down. Beijing has tightened its grip on Hong Kong in recent years, dimming hopes that the financial center will ever become a full democracy. (CFR)

Fed’s go-to inflation gauge cooled in February. The data suggests more benign inflation compared to the start of the year, but the indicator shows it is still above the Fed's target—the latest sign that crushing inflation will be a rocky process. (Axios)

Larry Fink warns of ‘snowballing debt’ hitting US economy. BlackRock Inc. Chief Executive Officer Larry Fink said the U.S. public debt situation “is more urgent than I can ever remember” and that the country needs to adopt policies to spur economic growth. (Bloomberg)

US salaries are surging for fully in-office jobs. Bosses want their workers back on-site on a more permanent basis. They're willing to pay a premium to do so. (BBC)

AI financial advisers are here—and could disrupt the industry. Great human advisers have seen almost every issue before and know how to handle it. They also, naturally, gravitate toward the richest and therefore most lucrative clients. (Axios)

International court orders Israel to do more to prevent famine in Gaza. The International Court of Justice (ICJ) issued an order calling on Israel to allow unimpeded access for humanitarian aid into the Gaza Strip, which the UN has warned is on the verge of famine. (Axios)

Tweaking US trade policy could hold the key to reducing migration from Central America. Small changes to U.S. trade policy could significantly reduce the number of migrants arriving at the southern border, according to our peer-reviewed study, which was recently published in The World Economy. (The Conversation)

Spraying manure and throwing beets, farmers in tractors again block Brussels to protest EU policies. Farmers threw beets, sprayed manure at police and set hay alight on Tuesday as hundreds of tractors again sealed off streets close to the European Union headquarters, where agriculture ministers sought to ease a crisis that has led to months of protests across the 27-member bloc. (AP)

Opposition figure who became Senegal’s president-elect won over 54% of the vote. Senegal’s little-known opposition figure who was elected president this week in a tightly contested race won over 54% of the votes, according to results. (AP)

EPA's new rules to clean up heavy trucking met with support and criticism. The Biden administration has approved the strictest-ever limits on greenhouse gas emissions from heavy-duty trucks. (NPR)

India's army of gold refiners face new competition. According to the World Gold Council, of the 900 tons of gold refined in India in 2023, 117 came from recycled sources. (BBC)

 

Mastering business expansion in Pakistan

Jamilex Gotay, editorial associate

Expanding your business internationally can enhance reach, access new markets and boost profits. However, it also presents challenges like language barriers and unfamiliar legal systems. Despite these risks, the benefits make international business expansion appealing for growth-seeking organizations.

Why it matters: Understanding and adapting to international markets is crucial for business expansion, as it not only mitigates risks but also fosters sustainable financial partnerships that can significantly increase profits.

Historically, Pakistan has thrived on its diversity, actively serving as the international trade hub among Iran, Afghanistan and India. The largest ethnic group in Pakistan are the Punjabi, accounting for a little less than half the population. Other ethnic minorities represented in the country include the Pashtun/Pathan, Sindhi, Sariaki, Muhajir and Balochi peoples.

Islam is practiced by majority of the population, with very small minorities practicing Christianity, Hinduism and other religions. Around 10 million Muslim refugees migrated from India to Pakistan in the mid-20th century, while many Hindu and Sikh communities moved to India. This swift, forced migration sparked enduring conflicts, notably over Kashmir.

The official language of Pakistan is Urdu, but English, Punjabi, Sindhi, Pashto, Baloch, Hindko, Brahui and the Punjabi variant Saraiki are also spoken, usually with a significant regional focus.

Pakistan's mixed economy is heavily reliant on state-owned enterprises, making it susceptible to global trade fluctuations and often lags behind its neighbors. The Pakistani rupee is the currency.

Top Export Partners

The United States purchases nearly 14% of all Pakistani exports. China buys 11% of exports, while Afghanistan and the United Arab Emirates (UAE) each purchase roughly 8%.

Major Export Products and Services

Apparel manufacturing and cotton textiles production represent Pakistan’s largest industries. Together they account for a little over half of total exports.

Approximately 28% of Pakistan land is under cultivation, supplied by one of the largest irrigation systems in the world, with agriculture as a major industry for the nation.

Agricultural exports include rice, vegetables, fish and fruit. Other major exports include leather goods, sports goods, chemicals, carpets and rugs.

Top Import Partners

China provides approximately 20% of all imports into Pakistan, followed by Saudi Arabia and the UAE at 12% and Kuwait at 6%.

Major Import Products and Services

Energy imports, namely petroleum products and electricity, account for approximately 30% of all Pakistani imports.

Even with a domestic agricultural sector, agricultural imports, including edible oils, cotton, wheat and consumer foods, are important to Pakistan.

Machinery, plastics, iron, steel and transportation equipment represent other major imports for the country.

Barriers to Trade (Tariff and Non-Tariff)

Pakistan stands at number 126 out of 178 countries in the Heritage Foundation’s Index of Economic Freedom. Trade in Pakistan is hindered by heavy regulations, weak intellectual property rights protection and import bans. Widespread corruption and political instability further increase trade costs and deter foreign investment.

Major Ports

Pakistan’s major ports including Gwadar, Karachi and Muhammad Bin Qasim.

Relationship Building

When establishing relationships with Pakistanis, it is important to keep in mind that they are not usually emotionally expressive. A Pakistani negotiator, once engaged, often develops an unspoken emotional investment in the outcome, which typically aids their win/win approach.

Communication in Pakistan may sometimes seem vague and indirect, especially early on in the negotiations. With time, Pakistani businesspeople usually become more open and direct as the relationship strengthens.

In Pakistan's business culture, dignity is crucial. Accidentally embarrassing someone could ruin negotiations. Keep calm, avoid open conflicts or clear signs of anger or impatience, and remember that politeness is key.

Negotiating

Negotiating in Pakistan is a lengthy process, aiming to build personal relationships. While the objective is mutual benefit, Pakistanis are tough negotiators who may use indirect and confrontational strategies to reach an agreement.

Pakistani negotiators avoid openly aggressive or harmful techniques, although they will use deceptive, subtle tactics and assume that you are also using them. Therefore, you must verify all information you receive from the Pakistanis with an outside source.

Pakistanis also withhold information during negotiations, believing it gives them a bargaining edge. They typically only share details in exchange for something equally valuable, despite spending time building relationships.

Nepotism is prevalent in Pakistani society, so don’t be surprised to learn that your business deals will include opportunities for relatives of the negotiators. If these requests don't harm your finances, comply for potential relationship benefits. If not, withdraw tactfully.

The unstable political environment in Pakistan fosters a cautious business climate, making it unlikely for anyone to pursue highly speculative ventures. Often, one-on-one discussions can be more productive. If your host prefers this, adapt your team structure accordingly.

Avoid sensitive topics such as religion, ethnic divisions in the country, and of course any reference to the relationship with India or the United States’ actions in Afghanistan.

Personal feelings and relationships supersede practicality in decision-making for Pakistan negotiations. Leverage this emotional sensitivity in negotiations when possible.

Business Etiquette

Patience is paramount when doing business in Pakistan as they take their time when making decisions. If possible, schedule negotiating sessions at least a month in advance and follow-up with a confirmation shortly before the appointment.

Pakistan is a relatively nonverbal business environment, and body language, along with facial and hand gestures, are closely monitored for their meaning. Eye contact is less important; avoid any gesture that could be interpreted as staring, as this is considered extremely rude, especially between men and women. Humor is seldom a part of conversation and should be used sparingly.

The Pakistani sense of honor dictates that personal decorum be maintained, while the importance of family and personal relationships ensures a cordial hospitality.

Business in Pakistan is conducted in a formal atmosphere, with people attired conservatively, especially in settings where observant Muslims are participants.

• Visiting businessmen should wear a lightweight suit and tie or whatever their own formal national dress is. Ties should be conservative in print and color and jewelry should be limited to a wedding band (if you are married) and watch.
• Many Pakistani women and men wear the salwar kameez, a wide-legged trouser and matching long tunic. Women's outfits will include a long scarf that can be worn over the hair or as a shawl.
• Some women prefer wearing a salwar kameez, sari or a Western-style business suit to the office. Dresses and skirts should be knee-length and loose-fitting, while blouses should cover the body and forearms. Accessories, jewelry, and makeup should be minimal and conservative.
• Foreign women are not expected to wear veils or cover their heads, but those who wish to do so will be well received.

For dinners in formal restaurants, formal business attire (a suit and tie) or a formal salwar kameez is recommended for men.

• Women should wear conservative Western or Pakistani attire, like full-sleeve blouses with long skirts or loose pants, salwar kameez, or saris. Men, when visiting homes, can wear dress pants and button-up shirts without suit jackets and ties.
• Women can dress casually yet conservatively in light fabrics like linen. However, they should avoid exposing upper arms and legs in public. Wearing a headscarf, while not mandatory, is seen as respectful.

 

Week in Review Editorial Team:

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate