COLOMBO, Nov 22: Prime Minister Shaukat Aziz said here on Monday that a free trade agreement between Pakistan and Sri Lanka would be finalized by November 24 , and it would become operational during the visit of Sri Lankan President Chandrika Kumaratunga to Pakistan in January 2005.
The prime minister, who is in Colombo as part of a tour of Saarc countries, told local civil society leaders and the media that he was confident that his forthcoming visit to India would "improve the atmosphere" between India and Pakistan.
On the possibility of bringing about a common Saarc currency, Shaukat Aziz said the region was too diverse and the deficit levels too varied for any immediate prospect of a common currency. "We have to learn to walk before we run." But individual countries in the region could have "swap arrangements" on currencies, Mr Aziz said.
APP ADDS: The prime minister said South Asia is a long way from launching a common currency but regional central banks could adopt currency swaps to encourage new investment.
Talking to a delegation of Sri Lankan businessmen before his departure for Maldives, Shaukat Aziz said central banks in Saarc could consider bilateral currency swaps for investment purposes.
The prime minister said a currency swap allowed a borrower in one currency to repay with another. "Swapping arrangements can be selectively considered by central banks for investments in our respective countries."
Shaukat Aziz said monetary system of Saarc countries was different from European and other regions; therefore, "a common Saarc currency is a long way ahead of us." He said Saarc, comprising Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, was still working on a free trade agreement after vowing to speed up their work during a summit earlier this year in Islamabad.
Shaukat Aziz said Saarc countries had considered a common trading bloc similar to the European Union but disparities in the size and scale of economies in the region posed a major challenge.
The prime minister said the region had the potential to attract more direct foreign investment, noting that all seven Saarc countries received only about $6 billion in foreign direct investment annually.