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Pak economic growth has bolstered int’l confidence: WB

WASHINGTON: Pakistan's continued high growth and attractive business prospects have bolstered international investors' confidence and expanded US-Pakistan cooperation in various fields can help realize the South Asian country's enormous economic potential on modern lines, American and World Bank experts said at a discussion.

"The United States cooperation can be very helpful in building infrastructure in Pakistan, diversifying exports, improving tax system and can also help promote security and stability in the region," said K. Alan Kronstadt, a specialist in Asian Affairs for the Congressional Research Service.

The discussion on "Sustaining Economic Reform in Pakistan” was jointly sponsored by the Pakistani American Leadership Center and the SAIS South Asia Studies Programme at Johns Hopkins University.

Kronstadt noted that Pakistan has sustained good macro-economic trends and underscored that human capital development and continuity of reforms would further spur economic prospects in the long-term. In the context of regional stability, he said the US involvement could help facilitate resolution of outstanding issues between Pakistan and India.

Esperanza Gomez Jelalian, Executive Director of the US-Pakistan Business Council, observed that Pakistan's impressive growth rate at an average of 7 percent of GDP in the last few years is a testimony to its economic potential. She said the council is fully supportive of US-Pakistan strategic dialogue for expanding cooperation in energy, education, science and technology areas.

"American entrepreneurs eye a lot of trade and business opportunities between the two countries," she said and listed oil and gas, surgical instrument manufacturing, information technology and engineering as among the most prospective sectors.

She noted that all sectors of the economy are open to foreign investment and the entrepreneurs can have 100 percent equity and Pakistan has a huge market of 160 million people.

Jelalian expressed the Business Council's support for Pakistan-US bilateral investment treaty. She informed the gathering that Pakistan drew US dollars 3.5 billion in foreign investment last year and this year the figure is expected to boost substantially.

In the question-answer session she observed that political stability in recent years has been factor in Pakistan's consistent growth, which she said would touch 7 percent of GDP this year.

She welcomed the initiative of setting up Reconstruction Opportunity Zones and said these zones would offer hope and economic opportunities to people. The participants discussed fiscal and trade reforms, the importance of good governance, transparency and second generation reforms in the context of Pakistan's continued economic progress. Adnan Hassan, a senior advisor at the World Bank, said Pakistan is witnessing a decline in poverty as is evident in the unprecedented production and spiraling sales of vehicles, TV sets, motorbikes, refrigerators, cell phones and other necessities of modern life. Pakistan has seen the emergence of a large middle class in urban areas, he said and was confident that it would propel economic growth in Pakistan in the years ahead, laying the basis for sustainable industrial progress. "The economic reality of Pakistan has a lot of good news to offer the poverty is reducing, the middle class is growing and a widely spread out organized banking system offers a basis for sustained and fast-paced growth."

In this respect, he also highlighted the importance of human resource development, particularly quality education and training for Pakistani youth, pinpointing that as much as 50 percent of its population is below the age of 19 years.

Responding to a question he remarked that the entrepreneurs keep existence of business and growth opportunities as their uppermost consideration. He said Pakistan ranks higher than many major regional economies in terms of ease of doing business.

He said with investors from the Far Eastern countries like Malaysia, European countries and South Africa planning to open up their businesses in Pakistan in a host of sectors "early elements are in place" for Pakistan to grow into a regional hub of trade and economic activity like Dubai.

Gary Clyde Hufbauer, a senior fellow at Peterson Institute for International Economics, saw a good possibility of a free trade agreement between Pakistan and the United States but said that would happen step-by-step and the two countries should first sign bilateral investment treaty. app

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