ISLAMABAD: Unchecked corruption is a bigger threat to the economy of Pakistan than terrorism, said the European Commission Ambassador Jan de Kok on Tuesday.
“Corruption is a greater impediment to investment than a deteriorating law and order situation,” he said while speaking at a roundtable session.
The discussion ‘Pakistan and the EU: Economic Cooperation and Future Prospects’ organised by the Islamabad Programme in Global Studies was held in collaboration with the Islamabad Chamber of Commerce and Industries (ICCI). He said Pakistan does not meet the requirements for Generalized System of Preferences (GSP) plus facility, but it can surely get greater access to EU market.
The ambassador further said that foreign investors signed documents for investment in Pakistan but later had to give up their plans due to different hurdles including corruption in the system.
“Companies take calculated risk. They don’t want the goalposts changed every now and then,” he said adding that accountability, good governance and rule of law are the pre-requisites to attract the foreign investment in Pakistan.
Pakistan needs regional economic integration “with and like” the EU countries to accelerate business activities. For this purpose, he said EU can help Pakistan enhance its economic and political relations with its neighbouring countries.
Defending the EU-India Free Trade Agreement (FTA) de Kok said India was a different country as per its economic size and population and had a longer history of democratic process.
On the other hand, he said, Pakistan’s economy was not ready for FTA at present. On issue of the famous slogan of ‘trade not aid’, the ambassador said aid was still valuable at a stage when poverty was high in Pakistan. This is a country where economic development, rural development and meeting the Millennium Development Goals (MDGs) are still a challenge.
The EU has granted duty-free access to Pakistan’s textile products. This has been done with an intention to help the country and recover its economy from the effects of massive floods. India, on the other hand, opposed this move at the forum of World Trade Organisation (WTO), stating that this move could make India’s export to the EU “uncompetitive”. To a query on whether the WTO would support EU’s waiver to Pakistan, the ambassador said, “We can’t predict the future. However, deviation from the WTO rules would not be easy.”
Earlier, Chairman of the Islamabad Program in Global Studies (IPGS), Senator Enver Baig said that market access creates limitless opportunities, resulting not only in competitiveness, job growth, exchange of technological know how, and development of skills but also the empowerment of people to meet challenges.
Market access granted by the EU will help Pakistan build up its capacity to become a more effective and a competitive actor in international economic relations. Speaking on the occasion, Mahfooz Elahi, President ICCI, asserted that the EU must realise the fact that Pakistan needed trade not aid to overcome its economic woes. It should provide help in rebuilding our economy that has been hit due to last year’s devastating flood.
“However, we appreciate that the European Commission in the wake of devastation caused by the unprecedented floods announced concessions for Pakistan on 75 tariff lines subject to WTO waiver.” “But despite our major share in textiles exports, the item was excluded in the offered list,” he said.
He added that the business community had concerns over the issue and urged that EU to review the concessions list and give more access to Pakistan ‘s textile products, especially home textiles.
Published in The Express Tribune, January 27th, 2011.
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