LAHORE, Nov 14: Punjab Finance Minister Sardar Hasnain Bahadar Dareshak has said a thriving trade in services is indispensable for the economic growth of the country and a necessary condition for poverty alleviation. Inaugurating a two-day conference on “General Agreement on Trade of Service (GATS): Challenges and Opportunities” here on Monday, he said the services were becoming increasingly important and had become vital to the functioning of economy. The sector was contributing more than 50 per cent to the provincial GDP, and there was a great potential to create jobs in it.
He said the services sector was not only important for domestic economy but was also important for the international economic performance through trade. International trade not only for goods but also for the services in the world was becoming increasingly significant both for the developed as well as developing economies.
He said thriving trade was indeed indispensable for economic growth which in turn was a necessary condition for poverty alleviation. The province had a vast potential for exporting services but it had remained largely unexploited so far. It was time to make the best use of the WTO regime for the liberalization of trade and services.
Mr Dareshak said the services industry should make constant efforts to improve its quality and competitiveness. The Punjab government had given priority to development of human resources through its business friendly policies and had taken a number of initiatives for enhancement of the potential of different services sectors.
The conference had been organized for raising the level of awareness about trade in services, identification of barriers in its expansion and providing inputs for policy and the ongoing negotiations on trade in services, he added.
He said the World Trade Organization members, including Pakistan, had committed themselves to further liberalization of trade in services within the framework of GATS. The negotiations were now in a crucial stage and there was a need for a greater knowledge of GATS, its rules and functioning.
He clarified that the GATS negotiations were about the opening up of trade in services and not about deregulation of services. The services required to be regulated sensibly to uphold the quality standards and protect the consumers. Service sectors also required to be opened for competition under an appropriate regulatory and economic framework.
Export Promotion Bureau chairman Tariq Ikram said the services sector in Pakistan had slumbered under the myopic vision of the past trade and financial leadership trying to protect the local industry. The leadership was not aware of the benefits of outward orientation resulting in direct foreign investment, transfer of technology and improvements in standard of services through international competition.
He said the present government had reviewed the previous protectionist policy in the year 2000 and included the trade in services in its export development strategy. Export earnings from the services sector during 2004-05 were $2.34 billion or 14 per cent of total exports of $16.73 billion. It was a respectable level when compared with the world average of 19 per cent.