Trade with India will solve Pak's growth problem: World Bank

Washington: For Pakistan’s economic growth, it is important for the country to have more trade with India, a top World Bank official has said.

Welcoming the recent move by India and Pakistan to initiate steps to improve business and trade ties, Isabel Guerrero, World Bank Vice President for the South Asia region, said this is crucial for the struggling Pakistan economy.

“I think it (improved Indo-Pak trade) is crucial. I am so happy to see that this is happening, because it could not have come at a better moment,” she told PTI.

[caption id=“attachment_249274” align=“alignleft” width=“380” caption=“World Bank Vice President Isabel Guerrero. Reuters”]  [/caption]

“I think Pakistan’s macro-economic situation, where they have a low tax revenue and high expenditure, budget deficit … the only way for Pakistan to get out of it is to grow. They have to grow out of this macro problem,” Guerrero said.

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Observing that Pakistan is strategically located between two Asian economic giants, India and China, which are the fastest growing countries in the world, she said why Pakistan is not having growth is a big question now.“Trade is the answer (to this question),” she said.

“If Pakistan can have more trade with India, it would have a huge impact … first of all in the bilateral relations, but also for Pakistan’s growth. That is the answer to get out of the low equilibrium through high growth,” Guerrero said.

Right now, she said, there is trade happening between Pakistan and India, except that it goes through Dubai. As a result of which the transport cost incurred are huge, she said, adding that this would disappear with the normalisation of trade relationship between the two countries.

The World Bank official welcomed recent decision of the Pakistan Cabinet to do away with the negative list. So from next year, the number of Indian products that could be traded with Pakistan would jump three times from the current about 2,000 to some 6,500 items.

The objective is to double bilateral trade in three years, Guerrero said. “I think, it would be more than that if all these things are implemented,” she added.

PTI