Open border to make Lahore an economic powerhouse

By Mateen Kaul

LAHORE: The city will become a regional economic powerhouse when the border with India is opened, said a World Bank economist yesterday.

Speaking at a Lahore University of Management Sciences seminar - Performance and Prospects: Pakistan and the Region - Dr Ijaz Nabi of the World Bank said an open border with India would make Lahore a hub of trade. “Lahore will be a major economic powerhouse, in both India and Pakistan, once the borders are open,” he said, adding Peshawar and Quetta would also grow once the country’s eastern borders are secure and open.

Mr Nabi compared the economies of East Asia and South Asia and said the better performance of the former owed to a lack of conflict. He also spoke about the benefits members of the South Asian Association for Regional Cooperation (SAARC) would reap from greater and enhanced regional trade. Dr Henri Ghesquiere of the International Monetary Fund spoke of the government’s work in reducing the national debt. While Pakistan is doing much work in this regard, he said it is still one of the most heavily indebted countries in the world. He hoped the debt would be down to 85 percent of GDP by June.

Pakistan’s former ambassador to the United Nations Jamshed Marker compared SAARC and ASEAN (Association of South East Asian Nations) countries. He said both organisations had diverse membership, a common colonial past and one giant member, India in SAARC and Indonesia in ASEAN. But while India dominated SAARC, Indonesia played a low-key role in ASEAN. The major difference between the two economic blocs was that while SAARC had been ridden by conflicts between member states, particularly the Indo-Pakistan dispute over Kashmir, ASEAN had been relatively conflict-free.

However, Mr Marker called the recent SAARC summit in Islamabad a “true sign of hope” and said the political climate was beginning to change. “To quote Victor Hugo, ‘all the forces in the world cannot stop an idea whose time has come.’ I hope this (Indo-Pakistan peace) is an idea whose time has come.” Economist and Daily Times contributor Dr Akmal Hussain said financial responsibility should be devolved to the district governments because councillors had to be more transparent in their development spending than provincial or federal governments. Councillors were only in charge of small neighbourhoods and knew that if they didn’t improve them, they would be voted out. Their budgets were also far smaller, so it was harder to make cash ‘disappear’.

Mr Hussain urged the government to concentrate on developing deprived districts. “Pakistan’s peri-urban areas are like concentration camps,” he said. “I’ve been there and seen children with withered faces. Sewage runs down the streets.” He said the Lahore district government was crippled by a lack of funds, having just Rs 70 million of its Rs 570 million budget left over after salaries were paid, “barely enough to paint markings on Lahore’s roads.”

World Bank Vice President Jemaluddin Kassum also spoke at the seminar and spoke of China’s tremendous economic growth over the last quarter of a century, its positive benefit on the region, and lessons Pakistan could take from it.

Mr Kassum said China’s economy had grown at a startling rate of nine percent per year over the last 25 years, that average income had doubled every eight years, and poverty had gone down from 49 percent in 1980 to 7 percent today. He said China’s continued growth had benefited its East Asian neighbours, fuelling their recovery after economic collapse in the late 1990s.

Pakistan’s former finance minister Sartaj Aziz said the government needed to increase investment and spend more on the pubic sector. He said it was important to improve and standardise education so that madrassas, Urdu-medium schools and English-medium schools didn’t produce such different worldviews.

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