ISLAMABAD, Nov 16: Declaring liberalising trade with India as a positive step, the economists and technical experts highlighted that Pakistan economy with all the potential to get a robust revival was capable of bouncing back.
They were of the view that the country had missed out some important historical period of higher economic growth when it could have undertaken sound economic reforms.
The speakers at a roundtable on ‘Global Economic Crisis, Regional Dimensions, and Pakistan’ organised by the Institute of Regional Studies (IRS), here on Wednesday said that weak economies could never gain strategic edge over their rivals through short-term measures and Pakistan needed to strengthen itself economically to negotiate the strategic and political terms.
“Pakistan will have to open trade with India for bringing back international confidence into its economy,” said Dr Rashid Amjad, Vice Chancellor of Pakistan Institute for Development Economics (PIDE).
Dr Amjad was of the view that Pakistan would be badly hit by the global economic crisis because of its lesser intra-regional integration and high dependence on exports to major economies.
“The global crisis could deepen Pakistan’s slow economic growth rate coupled with high-inflation,” Dr Amjad said and added: “Bangladesh and India would not suffer much adverse effects like Pakistan because of their strong macroeconomic fundamentals and high regional trade.”
Brushing aside strategic concerns over trade with India, Dr Amjad said that higher trade volume with India would also help open the markets of other regional countries for Pakistani exports.
Dr Amjad believed that Pakistan would have to address its vulnerability to external shocks by improving its tax to GDP ratio and better economic management. “A country’s fiscal deficit is directly related to its balance of payments and debt,” he maintained.
Other speakers strongly advocated the implementation of the Reformed General Sales Tax (RGST) for revenue generation and said that Pakistan needed to ease its monetary policy, cut its public expenditures and reorient its Public Sector Development Program (PSDP).
It was also highlighted that the devolution of powers to the provinces through the 18th Amendment and the 7th National Finance Commission (NFC) Award might complicate the process of economic planning.
Other participants of the discussion also emphasised the importance of improving governance, controlling corruption and improving revenue generation to withstand global economic crisis.
The others participants of the discussion included Dr Ejaz Ghani, Chief of Research and Dean of Economics at PIDE; Ambassador Ali Sarwar Naqvi, Executive Director of Center for International Strategic Studies; M. Ziauddin, Senior Journalist, Alexander Borges Gomes, First Counselor European Union Delegation to Pakistan and Ashraf Azim, President, IRS.