April 27, 2007	Friday	Rabi-us-Sani 09, 1428

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ISLAMABAD, April 26: The European Union (EU) has asked Pakistan to reduce the role of its military in private businesses.

In an umbrella statement released at the Pakistan Development Forum (PDF), the EU member states called for free and fair elections in the country.

The 27-member block also raised its serious concerns over bonded and child labour and warned that sustainable growth and poverty reduction would not be possible in the presence of mounting fiscal deficits and inflationary pressures.

“Economic growth alone will not empower the weak and disenfranchised,” the EU presidency said.

A Norwegian diplomat said the PDF would like the national and provincial assemblies to have ownership of any future development agendas, including the current poverty reduction strategy.

The EU raised questions on issues of governance, democratisation and human rights. It said that judges and lawyers play an important role as does the quality of legislation prepared and agreed upon by the parliament. “The independence of judiciary is a key element in a democratic state which respects the separation of powers.”

On the economic situation, the EU said that foreign direct investment was rising but “mounting fiscal deficits and inflation are a cause of concern.” It expressed concern on the sustainability of socioeconomic growth in Pakistan if climate change was not addressed and environmental degradation was not countered by taking appropriate measures.

“Pakistan faces several structural challenges in competing with successful Asian exporting countries; its export base remains narrow in terms of products and markets and international competition is increasing,” the EU said.

As Pakistan’s largest trading partner, the block asked Islamabad to increase diversification of exports and competitiveness through improved quality, reduced cost of doing business, adherence to international standards and trade related capacity buildings.

It said Pakistan’s continuing macro-economic development on path of considerable high growth rate was an important, although, not a sufficient remedy for reducing poverty.

The EU called upon the government to make the forthcoming Pakistan Poverty Reduction Strategy an operational strategy and to include priorities and time bound actions and incorporate its financial goals into annual budgets.

The EU said that respect for human rights was an essential pre-condition for development.

It said that fighting corruption and bringing those who misuse their office to justice will have a lasting effect on how citizens judge their government.