Resident Representative IMF in Pakistan Esther Perez Ruiz has asked the Pakistani government to provide a business conducive environment in the country.
Esther Perez Ruiz, Resident Representative IMF in Pakistan said that to realize the export potential, Pakistan needs proactive policies: exchange rate flexibility, efficient allocation of resources, and elimination of subsidies.
She stated while addressing the Economic Advisory Group (EAG) and Policy Research Institute of Market Economy (PRIME) organized an event to launch the “Trade Connectivity” Book with the support of Friedrich Naumann Foundation (FNF) Pakistan.
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The event was attended by dignitaries from the government, private sector, academia, IMF and the Ambassador of the Republic of Indonesia to Pakistan. The participants stressed the importance of trade and regional connectivity in promoting economic prosperity.
She further stated that tariff and non-tariff trade barriers impose serious constraints on growth and sustainability. Spain’s integration with the EU’s in the 80s and 90s was a political aspiration for the country, which led to a massive economic transformation. However, Pakistan’s exports to GDP reduced from 14% in 1990 to 10% in the 2000s. Also, Pakistan’s per capita GDP growth is very slow compared with its regional competitors.
Syed Naveed Qamar, Federal Minister for Commerce, acknowledged the importance of free markets and their role in promoting growth. He was of the view that export-led growth is the real aim of Pakistan and free trade will be imperative in this regard.
The recent import ban was not a well-thought initiative taken by the government but it was aimed at temporary restraint of imports. Moreover, the uncertain political environment in the country has further slowed down economic activity. However, the promotion of exports by tapping into new markets, and increasing the export basket by reducing the trade barriers is the ultimate way forward.
Birgit Lamm, Head of Country Office FNF Pakistan, enunciated that “Pakistan has a huge market with enormous potential for economic growth, but it’s time to translate this potential to act in creating wealth for the country & its citizens”.
Syed Javed Hassan, Chairman EAG expressed his views as “The EAG Book ‘Trade Connectivity’ looks at the practical aspects of trade and why Pakistan urgently needs to enhance connectivity and thereby intra-regional trade, and also become a trading hub for trade beyond the region.
The economic growth of nation-states is linked to their ability to exploit connectivity and interdependencies within strong regional blocs. EAG Trade Connectivity supports this view with contemporary trade theories by focusing on internal and external economies of scale, and also suggests practical policy measures that may be taken to bring the ideas into fruition”.
Dr. Ali Hasanain, Associate Professor of Economics at LUMS said “Creating and expanding gains from trade is at the heart of how economies grow. EAG’s “Trade Connectivity” book and today’s event are attempts to focus attention on these issues, and provide a compact overview of major issues currently holding Pakistan’s international trade down amongst the least trading nations of the world”.
Dr. Aadil Nakhoda, Assistant Professor of Economics at IBA, articulated that “Pakistan needs to make significant strides in participating in global value chains. The current situation is dire. However, there are opportunities if Pakistan undertakes regional trade agreements, reduces tariffs, focuses on improving the quality of products through technical non-tariff measures (NTMs) and attracts FDI in the manufacturing sectors. The government needs to ensure greater competition to foster innovation and improvement in productivity levels. Trade connectivity is an important vehicle for Pakistan’s progress”.
Adam Mulawarman Tugio said that the “Trade connectivity” Book is very insightful and comprises pertinent recommendations. Trade between ASEAN and Pakistan is very small as compared to the trade of China with ASEAN i.e. $200 billion. There is a lot of potentials to be explored through FTAs.
Ali Salman, Executive Director PRIME said, “Most of the trade liberalization coming out of a trade is from unilateral trade agreements and Pakistan needs to liberalize its trade policies by reducing taxes and tariffs. Only then the country would be able to integrate into the global value chains and promote exports”.
