Pak economist sees huge potential for bilateral trade with India | SupportBiz

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Pak economist sees huge potential for bilateral trade with India

Eminent economist and former governor of State Bank of Pakistan Ishrat Husain has stated that he saw huge prospects for bilateral trade, with India with both the countries taking steps to allow larger flow of goods.

Speaking to reporters in Hyderabad, Husain said that he hoped that by December, Pakistan would remove 1,200 items from the negative list to ensure that all items are traded between the two countries.

Husain, Dean and Director, Institute of Business Administration (IBA), Karachi, was talking to reporters on the sidelines of a ceremony to sign MoU with the Indian School of Business (ISB) to offer executive education in Pakistan.

A strong advocate of friendly relations, Husain noted that the number of items which India can export to Pakistan has increased from 1,200 to 6,800.

"About 75 percent of items can now be traded between the two countries, as compared to only 15-20 percent which was the case before. I think this is a big movement, and by December, even these 1,200 items which are on the negative list will be phased out. So, there will be no negative list, no positive list. All items between the two countries can be traded."

Husain said that granting Most Favoured Nation (MFN) status to India would benefit Pakistan.

He pointed out that the trade ministers of Indian and Pakistan were inaugurating the integrated border post between Wagah and Attari, which would take the number of trucks moving between the borders to 10 times from the present level.

"It is in anticipation of larger flow of goods from both the countries. They have revamped custom clearance procedure, infrastructure around there. All these measures have investment cost. They won't invest that much money unless there is an expectation that volumes of trade will go up," he added.

Impressed by the economic progress India has made over the last two decades and its advancement in science and technology, Husain said that Pakistan being India's next-door neighbour should benefit from this.

"I personally think that being the next-door neighbour of India can do a great deal of good to Pakistan," he said.

He also hoped that both the countries would dismantle barriers like issue of visas, telecommunication linkages and aviation exchanges.

On the Pakistani economy, he said that the inflationary pressures were high because of the elections. "This being election year, you always expect the fiscal side to be under very big pressure. You don't remove subsidies. You don't raise revenues. You keep on spending money. So, because of that, the borrowings from the central bank will be quite high, and this is why the Asian Development Bank is saying that inflationary pressures will be quite large," he quipped.

He hoped that in 2013, when elections would be over, the Pakistani economy would bounce back from its present situation.