Esther Perez Ruiz, the IMF’s resident representative in Pakistan, has urged the government of that nation to create a business-friendly climate.
According to Esther Perez Ruiz, the IMF’s resident representative in Pakistan, for Pakistan to fully achieve its export potential, proactive policies such as flexible exchange rates, effective resource allocation, and the abolition of subsidies are required.
In her remarks, she mentioned how the Friedrich Naumann Foundation (FNF) Pakistan supported the event that the Economic Advisory Group (EAG) and Policy Research Institute of Market Economy (PRIME) organised to launch the book on “Trade Connectivity.”
Government, business, academic, and IMF dignitaries as well as the ambassador of the Republic of Indonesia to Pakistan were present at the occasion. The importance of trade and regional connections in fostering economic growth was emphasised by the participants.
She added that trade restrictions, both tariff and non-tariff, severely impede development and sustainability. In the 1980s and 1990s, Spain’s political aim was to join the EU, which sparked a profound economic transformation. However, Pakistan’s exports as a percentage of GDP fell from 14% in 1990 to 10% in the 2000s. In addition, Pakistan’s GDP per capita growth is quite modest when compared to its rivals in the region.
The Federal Minister for Commerce, Syed Naveed Qamar, recognised the value of free markets and their contribution to economic prosperity. In his opinion, free trade will be crucial in achieving Pakistan’s actual goal of export-led growth.
Although the government’s recent import ban was not a well-considered move, it was intended to temporarily restrain imports. Furthermore, the country’s tumultuous political climate has caused a further slowdown in economic growth. The best course of action, however, is to encourage exports by reaching out to new customers and expanding the export basket by lowering trade barriers.
“Pakistan has a big market with immense potential for economic growth, but it’s time to transform this potential to act in creating prosperity for the country & its residents,” said Birgit Lamm, Head of Country Office FNF Pakistan.
The Chairman of the EAG, Syed Javed Hassan, stated his opinion as follows: “The EAG Book “Trade Connectivity” looks at the practical aspects of trade and explains why Pakistan urgently needs to improve connectivity in order to increase intra-regional trade as well as serve as a hub for trade outside the region.
The capacity of nation-states to capitalise on connectedness and interdependencies within powerful regional blocs is a key factor in determining their economic success. By emphasising internal and global economies of scale, EAG Trade Connectivity supports this viewpoint with modern trade theories and also recommends useful policy actions that could be implemented to realise the principles.
The core of how economies thrive is the creation and expansion of benefits from trade, according to Dr. Ali Hasanain, Associate Professor of Economics at LUMS. Both today’s event and EAG’s “Trade Connectivity” book are attempts to draw attention to these problems and give a concise outline of the main problems currently keeping Pakistan’s international trade among the world’s least trading nations.
According to Dr. Aadil Nakhoda, Assistant Professor of Economics at IBA, Pakistan must take substantial steps to join global value chains. The situation is rather bad right now. However, if Pakistan enters into regional trade agreements, lowers tariffs, concentrates on enhancing product quality through technical non-tariff measures (NTMs), and draws FDI in the industrial sectors, there are opportunities. To promote innovation and raise productivity levels, the government must assure more competition. Trade connectivity is a key means of advancement for Pakistan.
The “Trade connection” Book, according to Adam Mulawarman Tugio, is quite perceptive and has useful ideas. Compared to China’s $200 billion in trade with ASEAN, the ASEAN-Pakistan trade is quite tiny. FTAs offer a lot of potentials to be investigated.
“Most trade liberalisation resulting from a trade is from unilateral trade agreements, and Pakistan has to liberalise its trade policy by lowering taxes and tariffs,” stated Ali Salman, Executive Director of PRIME. Only then would the nation be able to join global value chains and encourage exports.