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Pak-India trade much below full potential: WB

Press Trust of India

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Islamabad, Dec 6: Trade between Pakistan and India is only valued at a little over $2 billion, but it could be as high as $37bn, says a World Bank report.

The current trade between the two countries is much below its full potential. It could only be harnessed if both countries agreed to tear down artificial barriers.

The bank also estimated Pakistan’s potential trade with South Asia at $39.7bn against the actual current trade of $5.1bn.

 

The report, “Glass Half Full: Promise of Regional Trade in South Asia”, released here on Wednesday unpacks four of the critical barriers to effective integration.

The four areas are tariff and para-tariff barriers to trade, complicated and non-transparent non-tariff measures, disproportionately high cost of trade, and trust deficit.

Talking to a group of journalists on key points of the report here at the World Bank office on Wednesday, lead economist and author of the document, Sanjay Kathuria, said it was his belief that trust promotes trade, and trade fosters trust, interdependency and constituencies for peace. In this context, he added, the opening of the Kartarpur corridor by governments of Pakistan and India would help minimise trust deficit.

He said such steps will boost trust between the two countries. For realising the trade potential between Pakistan and India, he suggested the two countries start with specific products facilitation in the first phase.

Kathuria said Pakistan had least air connectivity with South Asian countries, especially India. Pakistan has only six weekly flights each with India and Afghanistan, 10 each with Sri Lanka and Bangladesh and only one with Nepal, but no flight with the Maldives and Bhutan.

Compared to this, India has 147 weekly flights with Sri Lanka, followed by 67 with Bangladesh, 32 with the Maldives, 71 with Nepal, 22 with Afghanistan and 23 with Bhutan.

The report recommends ending sensitive lists and para tariffs to enable real progress on the South Asia Free Trade Agreement (Safta) and calls for a multi-pronged effort to remove non-tariff barriers, focusing on information flows, procedures, and infrastructure.

Policy-makers may draw lessons from the India-Sri Lanka air service liberalisation experience. Connectivity is a key enabler for robust regional cooperation in South Asia.

Kathuria says reducing policy barriers, such as eliminating the restrictions on trade at the Wagah-Attari border, or aiming for seamless, electronic data interchange at border crossings, will be major steps towards reducing the very high costs of trade between Pakistan and India.

He argues that the costs of trade are much higher within South Asia compared to other regions. The average tariff in South Asia is more than double the world average. South Asian countries have greater trade barriers for imports from within the region than from the rest of the world.

He says these countries impose high para tariffs, which are extra fees or taxes on top of tariffs. More than one-third of the intraregional trade falls under sensitive lists, which are goods that are not offered concessional tariffs under Safta. In Pakistan, nearly 20pc of its imports from, and 39pc of its exports to, South Asia fall under sensitive lists.

World Bank Country Director for Pakistan Illango Patchamuthu said Pakistan is sitting on a huge trade potential that remains largely untapped. “A favorable trading regime that reduces the high costs and removes barriers can boost investment opportunities that are critically required for accelerating growth in the country,” he said.

World Bank’s Director Macroeconomics, Trade and Investment Caroline Freund said Pakistan’s frequent use of tariffs to curb imports or protect local firms increases the prices of hundreds of consumer goods, such as eggs, paper and bicycles.

They also raise the cost of production for firms, making it difficult for them to integrate in regional and global value chains, she said. “Pakistan needs to promote export promotion policies to ensure sustainable growth.”

On the issue of currency devaluation, she said undervalued currency is an anti-export measure. She suggests exchange rate should be determined by the real market trend.


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Time for talks over, world must act now: PM

Agencies

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New Delhi, Feb 18: The Pulwama attack which claimed the lives of 49 CRPF men shows that the time to hold talks on “terrorism” is over and there is an urgent need to unite against such elements, Prime Minister Narendra Modi said on Monday.

The Prime Minister, who was holding talks with Argentina President Mauricio Macri, said dithering to take action against militants and their supporters will be like encouraging militancy.

“Brutal attack in Pulwama proves that time for talks have passed. Now the entire world needs to unite against ‘terrorism’ and its supporters and take strong actions,” PM said.

 

President of Argentina Mauricio Macri said, “I would like to convey my condolences to the victims of the cruel attack (Pulwama) perpetrated just a few days ago. We condemn every kind of terrorist attack. I am truly pleased to be able to working together to fight this scourge on mankind.”

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Cross LoC trade, bus service suspended

Bisma Bhat

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Srinagar, Feb 18: The cross-LoC trade between India and Pakistan via Poonch has been suspended in backdrop of the Pulwama suicide attack in which 49 CRPF personnel were killed last Thursday.
“Since the incident, no truck was allowed to cross the Line of control hence affecting the trade,” an official said.
He added that Poonch-Rawalakot cross-LoC bus service too has been suspended till further orders.
President, Cross LoC trade Union, Pawan Anand told The Kashmir Monitor that 60 trucks are stranded at trade centre (Chakan Da Bagh).
“We got orders to suspend the trade,” he said.
Pawan said that at least they have endured more than 4 crore of losses due to the trade suspension.
He added that most of the trucks are loaded with grapes, tomato, banana, tamarind and ser (zeera).
Besides Poonch, the cross-LoC trade also takes place through Srinagar-Muzaffarabad road in Uri.
However, DC Baramulla, Nasir Ahmad Naqash, confirmed that Uri has not received any order for trade suspension yet.

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MBS conferred Nishan-e-Pakistan: Saudi vows to ‘de-escalate’ India-Pakistan tension

Agencies

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Islamabad, Feb 18: Saudi Arabia vowed to “de-escalate” rising tensions between Pakistan and India during a high-profile summit in Islamabad Monday as Crown Prince Mohammed bin Salman prepares to travel from Islamabad to New Delhi.
The kingdom’s foreign minister spoke at a press conference in Islamabad as Pakistan recalled its envoy from Delhi for “consultations”, the latest development in a fresh diplomatic crisis between the nuclear-armed neighbors.
Delhi has vowed to retaliate after a suicide blast which killed over 40 Indian paramilitaries in Kashmir on Thursday, the deadliest attack in Kashmir in recent decade.
The attack has sparked widespread calls in India for action against Pakistan.
“Our objective is to try to de-escalate tensions between the two countries, neighboring countries, and to see if there is a path forward to resolving those differences peacefully,” said Saudi Foreign Minister Adel al-Jubeir.
The pledge came as the crown prince, widely known as “MBS”, prepared to head for India later Monday, at the conclusion of his two-day visit to Pakistan.
India is garnering diplomatic support after the attack and has vowed to “isolate” Pakistan diplomatically in the international community, saying it has “incontrovertible evidence” of Islamabad’s role.
Pakistan has rejected the allegations.
Meanwhile, Pakistan President Arif Alvi on Monday conferred the country’s highest civil award — Nishan-e-Pakistan — on Saudi Crown Prince.
Mohammad bin Salman was honoured due to his “outstanding support for reinvigorating Pak-Saudi bilateral relationship”, Dawn reported.
Following the Pakistan president’s speech, the Saudi crown prince, as per Dawn, addressed the audience. “I was honoured to meet the president of Pakistan. I thank you for honouring me with Pakistan’s highest award.
“The brotherly relationship between the kingdom and Pakistan focus on the principle of Islamic solidarity. It is a model to be emulated by other nations. Our [countries’ relationship] go back 67 years that witnessed continuous development that rendered itself beneficial for both countries.
“The founding fathers for both countries established these relations on the principles of truthfulness, common understanding and mutual respect that go back to the first days of the establishment of Pakistan, post-World War 2.
“Our Pakistani brothers participated truthfully and effectively in the great development project that Saudi Arabia witnessed, especially the enlargement project of Masjid-e-Haram and Masjid-e-Nabwi. More than 2 million Pakistanis are working in Saudi Arabia and are contributing to the development of both the countries.
“I wish all the best to the president and the prime minister in the service of this country and its people.”
At the conclusion of the ceremony, the Saudi crown prince said his goodbyes to the Pakistan president and members of the federal cabinet before leaving for Nur Khan Airbase. As was the case when he had arrived, Pakistan prime minister Imran Khan personally drove the car carrying the Saudi crown prince.
On Sunday, MBS signed $20 billion in investment deals with cash-strapped Islamabad and vowed to free thousands of Pakistani prisoners in Saudi custody.

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