Pakistan’s trade with South Asia can be enhanced to $ 67 bn: World Bank
ISLAMABAD (WEB HAMARI) – World Bank lead economist Sanjay Kathuria Wednesday said the current level of Pakistan’s trade with South Asia of only $ 23 billion per year which was low against the potential of around $ 67 billion which could be tapped by increasing business ties with the regional countries .
“Pakistan’s trade with South Asia accounts for only 8 per cent of its global trade and the country can increase its exports to regional countries by eight times,” he said while speaking to journalists at the World Bank office on Wednesday.
Sanjay Kathuria has authored the recently launched World Bank report titled “Glass Half Full: The Promise of Regional Trade in South Asia”, which should take place in South Asia.
Sanjay said Pakistan’s current trade with South Asia was $ 5.1 billion against the potential of over $ 39 billion per year.
With the rest of the world, the total trade was $ 67.9 billion, I added.
In order to achieve the real potential of regional trade, Sanjay suggested to remove the unnecessary non-tariff barriers within the region, increase people to those contacts, improve road and air connectivity, and liberalize trade within South Asia.
On the occasion, World Bank Country Director for Pakistan, Illango Patchamuthu said “Pakistan is sitting on a huge potential trade that remains largely untapped.”
“A favorable trading regime that reduces the high costs and removes barriers can boost investment opportunities that are critically required for accelerating growth in the country.
“Meanwhile Macroeconomic Trade and Investment Director, WB, Caroline Freund said Pakistan’s economy showed significant improvement during the previous year when the total GDP growth rate was recorded at 11-years high of 5.8 per cent.
However, Pakistan really needs export promotion policies to ensure sustainable economic growth.
With respect to the currency exchange rate, Caroline termed the undervalued currency as a part of anti-export policies saying that if a currency of any country is undervalued, the imports would get cheaper and the exports would be costlier and would ultimately discourage the exporters.
To a question, she said the appreciation of any country’s currency by 10 per cent would mean the contraction of exports by 5.7 per cent.
She said the value of the exchange rate should be determined by the real market trend by balancing the other implications of devaluation including inflation, increasing debts, and increased cost of business.
Meanwhile, a press statement issued by the World Bank said while Pakistan and India collectively represent 88 per cent of South Asia’s Gross Domestic Product (GDP), trade between the two countries is only valued at a little over $ 2 billion which could be as high as $ 37 billion.
Regional trade can create many more jobs and make the country prosperous if trade barriers with South Asia especially between India and Pakistan are removed.
Pakistan’s trade with South Asia accounts for only 8 per cent of its global trade, despite the region being the world’s fastest growing.