• Wednesday, December 12, 2018

Pakistan's trade can rise eightfold: World Bank report

Discussion in 'Pakistan Economy' started by Dubious, Dec 6, 2018 at 4:50 PM.

  1. Dubious

    Dubious MODERATOR

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    [​IMG]Fawad MaqsoodDecember 5, 2018

    [​IMG]ISLAMABAD: Regional trade can create many more jobs and make the country prosperous if trade barriers with South Asia are removed, says a new World Bank report.

    Pakistan’s trade with South Asia accounts for only 8 percent of its global trade, despite the region being the world’s fastest growing. However, intraregional trade in South Asia is among the lowest at about 5 percent of total trade, compared with 50 percent in East Asia and the Pacific.

    The recently-launched Glass Half Full: The Promise of Regional Trade in South Asia report documents what needs to be done to realize the full trading potential in South Asia.

    It was launched at the 11th South Asia Economic Summit, hosted by the Sustainable Development Policy Institute in Islamabad.

    It identifies four critical barriers to regional trade: tariffs and Para tariffs, real and perceived no tariff barriers, connectivity costs, and a broader trust deficit.

    “Pakistan is sitting on huge trade potential that remains largely untapped,” said Illango Patchamuthu, World Bank Country Director for Pakistan.

    “A favorable trading regime that reduces the high costs and removes barriers could boost investment opportunities that is critically required for accelerating growth in the country.

    ” The report argues that the costs of trade are much higher within South Asia compared to other regions.

    The average tariff in South Asia is more than double the world average. South Asian countries have greater trade barriers for imports from within the region than from the rest of the world.

    These countries impose high Para tariffs, which are extra fees or taxes on top of tariffs.

    More than one-third of the intraregional trade falls under sensitive lists, which are goods that are not offered concessional tariffs under the South Asian Free Trade Area (SAFTA).

    In Pakistan, nearly 20 percent of its imports from, and 39 percent of its exports to, South Asia fall under sensitive lists.

    “Pakistan’s frequent use of tariffs to curb imports or protect local firms increase the prices of hundreds of consumer goods, such as eggs, paper and bicycles.

    They also raise the cost of production for firms, making it difficult for them to integrate in regional and global value chains,” said Caroline Freund, Director, Macroeconomics, Trade and Investment, World Bank.

    South Asian countries are yet to reap the benefits of shared land borders, the report adds.

    While Pakistan and India collectively represent 88 percent of South Asia’s Gross Domestic Product, trade between the two countries is only valued at a little over $2 billion. This could be as high as $37 billion. “For example, it is cheaper for Pakistan to trade with Brazil than with India.

    Reducing policy barriers, such as eliminating the restrictions on trade at the Wagah-Attari border, or aiming for seamless, electronic data interchange at border crossings, will be major steps towards reducing the very high costs of trade between Pakistan and India,” said Sanjay Kathuria, World Bank Lead Economist and lead author of the report.

    The report recommends ending sensitive lists and para tariffs to enable real progress on SAFTA and calls for a multi-pronged effort to address non-tariff barriers, focusing on information flows, procedures, and infrastructure.

    Policy makers may draw lessons from the India-Sri Lanka air services liberalization experience, the report suggests, where liberalization was gradual and incremental, but policy persistence paid off.

    Connectivity is a key enabler for robust regional cooperation in South Asia.


    Copyright PPI (Pakistan Press International), 2018

    https://www.brecorder.com/2018/12/05/456939/pakistans-trade-with-south-asia-can-rise-by-eight-fold/
     
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  2. RPK

    RPK SENIOR MEMBER

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    Means India? India has MFN for Pakistan. What Pakistan has to offer?
     
  3. Dubious

    Dubious MODERATOR

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    06 Dec 2018 - 13:52

    [​IMG]
    By Islamud Din Sajid | Anadolu
    ISLAMABAD, Pakistan: Pakistan’s trade with South Asia could rise eightfold if Islamabad removed its trade barriers with regional countries, a new World Bank report said on Thursday.

    The report indicated that trade between the two South Asian neighbors Pakistan and India is valued at only a bit above $2 billion.

    "Pakistan is sitting on a huge trade potential that remains largely untapped," said Illango Patchamuthu, World Bank country director for Pakistan.

    A favorable trade regime that brings down high costs and removes barriers could boost investment opportunities critically needed for accelerating growth in the country, he added.

    The report further said that regional trade could create many more jobs and make the country prosperous if trade barriers with South Asia were lifted.

    According to the report, the costs of trade are much higher in South Asia compared to other regions, as the average tariff in the region is more than double the world average.

    "Pakistan's frequent use of tariffs to curb imports or protect local firms increases the prices of hundreds of consumer goods, such as eggs, paper, and bicycles. They also raise the cost of production for firms, making it difficult for them to integrate in regional and global value chains," said Caroline Freund, the World Bank’s director of macroeconomics, trade and investment.

    Though together Pakistan and India represent 88 percent of South Asia's gross domestic product, trade between the two countries is only valued at a little over $2 billion, but it could be as high as $37 billion, the bank suggested.

    The report recommended ending sensitive lists and para tariffs to enable real progress on the South Asian Free Trade Agreement (SAFTA) and called for a multi-pronged effort to address non-tariff barriers.

    "By reducing man-made trade barriers, trade within South Asia can grow roughly three times, from $23 billion to $67 billion," added Sanjay Kathuria, a World Bank economist.


    https://www.thepeninsulaqatar.com/a...-s-trade-can-rise-eightfold-World-Bank-report

    Wonder if the author is oblivious to the tensions between the 2 countries or is just proposing a theory?
     
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  4. VCheng

    VCheng ELITE MEMBER

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    I think the author is trying to show the economic benefits of reducing regional tensions.
     
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  5. Dubious

    Dubious MODERATOR

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    There is more than india in South Asia...BD, Sr Lanka, Nepal, Bhutan...
     
  6. Dubious

    Dubious MODERATOR

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    yea when we cant even get india to sit at the same peace table...so basically theory?
     
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  7. RPK

    RPK SENIOR MEMBER

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    All other countries trade already Integrated with India except Pakistan.
     
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  8. VCheng

    VCheng ELITE MEMBER

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    It is up to both sides to work at reducing tensions.
     
  9. Dubious

    Dubious MODERATOR

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    it should be 2 way...when india sits at the table then we can stretch further
     
  10. VCheng

    VCheng ELITE MEMBER

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    It takes a lot of prior work to get two parties to a table.
     
  11. 313ghazi

    313ghazi SENIOR MEMBER

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    Protectionism is harmful to industry. Protection/heavy regulation should only be provided for two sectors;

    1. Essentials for survival of the state such as agriculture, energy, defence.
    2. Essential to the every day running of the state, like public transport, health, education, housing

    Everything else should have to fight for survival in the free market.
     
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  12. RoadRunner401

    RoadRunner401 SENIOR MEMBER

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    On paper only, Pakistani goods are held at Indian borders (unofficial, official policy of Indian customs) for extra long times, adding millions to the cost, you call that MFN.

    I am more than happy to discus this with any adult will not discus with 2 year old.
     
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  13. Indus Pakistan

    Indus Pakistan PDF THINK TANK: CONSULTANT

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    Civilization. Balls. Take your pick. What does India have to offer that we can't get from China?

    Dalits unlimited?
     
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  14. HariPrasad

    HariPrasad BANNED

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    Cheers and best of luck for Pakistan.
     
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  15. Dubious

    Dubious MODERATOR

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