ISLAMABAD, Jan 07 (APP): In a push for economic growth, the Pakistan Business Forum (PBF) has highlighted the crucial need for regional trade agreements among South Asian nations, as Chaudhry Ahmad Jawad, the Vice President of PBF, stressed the vital role of friendly relations with neighboring countries in promoting sustainable and inclusive development.
This call to action comes as Pakistan grapples with sluggish economic performance, characterized by a modest 4 percent average annual growth between 2010 and 2023, coupled with a growing debt-to-GDP ratio, Director PR said on Sunday while talking to APP.
Jawad asserts that embracing trade with neighboring countries, currently at near-nonexistent levels, could be a transformative step. Citing World Bank research, he posits that Pakistan’s exports could surge by 80 percent, significantly impacting GDP and employment, with normalized trading relationships. This, coupled with deeper economic engagement, is seen as a remedy for acute issues such as inflation, a rent-seeking private sector, and the longstanding energy crisis.
The PBF official advocates for a comprehensive approach, utilizing the gravity model of trade to unlock the full potential. Highlighting the significance of variables like GDP, distance, and Regional Trade Agreements (RTA), Jawad argues that trade is directly proportional to the product of economies’ GDPs and inversely proportional to the distance between them. The gravity model suggests that even a modest change in tariffs can have notable effects on Pakistan’s total trade.
Looking back at the trade landscape, PBF notes that in 2021–22, the United States, China, the United Kingdom, Germany, and the Netherlands were major trading partners for exports, while China, the United Arab Emirates, Indonesia, the United States, and Saudi Arabia led in imports.
He said that, shifting focus to Afghanistan, PBF advocates for enhanced trade facilitation to unleash the true potential of commerce between Pakistan and Afghanistan.
He emphasized that with trade between the two nations fluctuating over the years, from $2.5 billion in 2010 to $1.6 billion in 2022–23, PBF calls for streamlined payment settlements, improved insurance mechanisms, and simplified processes in visa issuance, trade financing, tax collection, and documentation to revitalize and expand trade ties.
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