ISLAMABAD, Dec 17: The World Bank has asked Pakistan to adopt export-led growth policy for economic turnaround and seek foreign investment in dynamic and productive sectors instead of mega infrastructure projects.
The advice was conveyed to Minister for Commerce Humayun Akhtar Khan here on Tuesday by Dr. Pervez Hassan, who is currently leading a World Bank mission to Pakistan.
Dr. Pervez Hassan was head of a special task force on debt management but its recommendations approved by the Federal Cabinet early last year could not be implemented as yet. He figured out governance problems in the revenue collection side.
Humayun Akhtar agreed to some of his critical observations and noted that sale tax refunds were openly sold in the market and in fact there was negative sale tax in the country. He said that even products on which the exporters claim refund were never exported.
Mr. Hassan said the new government should get itself prepared for the next round of trade and industrial expansion through export-led growth because export sector was poised to grow faster than the real economy.
He advised the government to create an environment where input costs and utility prices were available to the exporters and manufacturers at the international level like China had done through creation of free trade zones.
He told the minister that China had become a leading exporter of garments and textiles in the world because it invited foreign investors to the free trade zones where there were no restrictions which resulted in employment and value addition.
Dr. Pervez said that instead of looking at big countries, Pakistan should concentrate on growing economies like Thailand, Malaysia and Korea that would find it more convenient to move out their existing industries to countries like Pakistan where cheap labour could be utilized for exports.
He deplored that in many cases associations of exporters and chambers were not even listened to and their letters seldom responded by the government agencies. The issue, he said should be tackled by the government.
Pervez said that Pakistan missed out the free trade zone concepts and could not develop an structure where it could move forward like Korea and Bangladesh had done.
He said that Chinese should be asked to bring in investments in dynamic sectors for export growth instead of mega projects.
