Economists and industrialists have urged the government to strengthen the diplomatic front in order to win WTO’s waiver in the EU market, which may help revive the country’s economy.
Talking to the Profit, Former Finance Minister, Dr Salman Shah, renowned economists Dr Khawaja Amjad Saeed, Dr Qais Aslam, Dr Shahid A. Zia, industrialists M Ali Mian and Shahzad Ali Malik agreed that mismanagement is the only barrier in economic revival of the country as Pakistani products have the potential to compete with any Indian or South Asian product in the international market.
Dr Salman Shah said that regulatory barriers continued to hold Pakistan back from developing its full trade potential. High costs of doing business, complex regulation and infrastructure bottlenecks have all had a detrimental effect on trade and growth, given the country’s trade regime and regulatory environment which remains to be comparatively restrictive.
Dr. Shah maintained that the economic stagnation could only be tackled by introducing investment friendly policies, improving organisational structure and strengthening institutions. He said that the government has failed to strengthen the confidence of foreign investors, due to which foreign direct investment has fallen to a record low in the current fiscal year.
To a query regarding war on terror, Dr. Shah said that the war must be continued even after US troop withdrawal from the region. He further elaborated his point by saying that the Taliban have caused great harm to the country’s economic structure and Pakistan has no other option but to unarm the Taliban. “Our survival depends on the revival of our status in international community; no nation can sustain its integrity or freedom having Trojan Horses among them,” said Dr Salman Shah.
He added that the EU trade package could help Pakistan to a great extent, but he fears the current management does not have the aptitude to win the battle, where both Indian influence and cheaper products are working against us. Similarly, Dr Khawaja Amjad Saeed stressed upon the need for concerned authorities including the Foreign Office, Ministry of Commerce, Trade and Development Authority of Pakistan (TDAP) and Pakistan’s Economic Minister at WTO for strongly pursuing the issue at the WTO till the package of incentives and concessions from EU is finally settled.
“For this purpose, we only need to keep national interest in mind, putting all other affairs and issues on second priority including War on Terror and even Law & Order situation, as economic instability is the mother of all woes.”
Dr. Khawaja said that India is not only opposing the trade-concession package to Pakistan, but is also blocking a move by the neighboring country to be counted as the Least Developed Country at the World Trade Organisation (WTO).
He maintained that early refusal from EU is a wake up call for Pakistani diplomats, foreign office and the federal government. “India has succeeded to get the package, we are on hold, and it is nothing but another diplomatic failure on our part.” Dr Qais Aslam said that the endless bureaucratic corruption has led the country to a point of no return. He maintained that the mismanagement and incompetence of ignorant policy makers could not win the Pakistani case and cause.
He said, Pakistan had far better trade relations with EU till the beginning of 2008; Pakistan can still catch EU’s attention if we could play a more effective role in the war on terror. Dr. Qais added that Pakistan is front line state in the war and the authorities must not be impatient and attract NATO’s anger, as we need them more than they need us.
Dr Shahid A Zia said that The ‘Mohali spirit’ was hailed but India’s outlook on Pakistan regarding multilateral trade bodies continues to be dogged by a traditional mindset. He added that India had continued to be in the forefront of a group of nations opposing the move which needs approval from both the European Parliament and WTO. “The government should consult all stake holders to counter the Indian move, and a professional strategy should be prepared to take up the rejection of EU trade package,” said Dr Shahid.
LCCI President Shahzad Ali MAlik emphasised upon increased market access of Pakistani exports to the EU and stressed for early operationalisation of trade concessions by obtaining WTO’s waiver which has been on hold for a long time. Malik also urged for EU’s support for the GSP Plus status for Pakistan’s exports to EU which he said would facilitate investments and help creation of jobs.
In the same context, renowned industrialist M Ali Mian said that upward revision of Import Vulnerability Criterion (IVC) from 1 to 2 per cent as eligibility criterion for GSP Plus in the proposed scheme starting from 2014 would help Pakistan benefit from the additional space for export of its goods to the EU. It merits mentioning here that the European Union (EU) will place Pakistan specific preferential trade package before the WTO Council of Trade and Goods (CTG) once again in November 2011.
Minister for State for Foreign Affairs, Hina Rabbani Khar vowed to continue silent diplomacy with all the concerned countries on this issue. India and Bangladesh are two major opponents of the EU’s proposed Pakistan specific trade package with the objective of providing assistance for the flood victims. Pakistan’s trade with the EU is mainly composed of textiles, which account for over 60 per cent of the total Pakistani exports to the EU, followed by leather products, which account for 13 per cent of the total Pakistani exports.
Pakistan’s export structure lies very much on a traditional product mix. The imports from the EU to Pakistan mainly comprise finished products like mechanical and electrical machinery, which accounts for over 35 per cent, followed by chemical and pharmaceuticals for 10 per cent of the total EU imports to Pakistan.
