ISLAMABAD: The government has embarked upon an ambitious programme of economic corridor and to operationalise Gwadar Port for linking Pakistan to regional markets, Finance Minister Ishaq Dar said on Monday.

Addressing officers at Pakistan Air headquarters in the federal capital, with audience from 23 PAF bases listening to him via satellite, the minister said that after completion the economic corridor will make the country an attractive transit hub.

Dar spoke at length on the theme “Trade, Aid and Development: Lessons for Pakistan”, saying “trade not aid” is the guiding principle for the government. “I am sure that with our declared economic policies, commitment, good governance and transparency, we will make Pakistan a leading regional economy in the next few years.”

He said his government fully realised the potential of trade development. The global gains from trade liberalisation are enormous, ranging from $290-460 billion a year. He said that many developing countries through the multi-lateral institutions have tried substituting foreign aid to fill the savings-investment gap.

The minister said that looking back over the last four decades and focusing on East Asia and China, one can see that trade has been instrumental in surmounting poverty. The increased integration into the world economy through trade has boosted growth.

The minister said China has made it to the top of the world on the strength of its trade. Through reforms, the country captured international markets of household, electrical, sports and, in short, all finished products markets.

As a result of globalisation, the increasing integration of trade, finance, people, and ideas in one marketplace has enhanced international trade and cross-border investment flows.

He said benefits of free trade as opposed to aid are enormous for a country, and they accrue from increased access of their producers to larger international markets.

Foreign assistance, he said, has been a major source of external financing for developing countries over the past several decades. It was required where demand for investment cannot be met from domestic savings and exports earnings were also insufficient to finance imports.

Studies related to Pakistan suggest that sound economic management policy in terms of low inflation, trade openness and low budget deficit are critical for the effectiveness of foreign assistance.

Dar said the present government has adopted an aggressive reform programme based on four Es (Economy, Energy, Elimination of extremism, and Education) as enumerated in his party’s manifesto.

The minister remarked that a liberalised trade regime benefits the economy with efficient infrastructure linking local producers to domestic, regional and global markets and a regulatory environment that encourages a vibrant private sector.

Published in Dawn, September 30th , 2014