‘Pakistan needs fundamental economic reforms’

US envoy says damaged infrastructure is hindering regional trade

LAHORE:

US investment in Pakistan has increased by 50%, the highest in decades in the last few years, but the country needs fundamental economic reforms to encourage new investment said Donald Blome, US Ambassador to Pakistan.

During his visit to the Lahore Chamber of Commerce and Industry (LCCI) on Monday, the ambassador said that Pakistan and the United States (US) share 75 years of bilateral economic ties and that US investment in the country has increased 50% in the last few years.

Highlighting that there still substantial room for growth in economic ties, and pointing out that the floods caused immense damage to the infrastructure in the country which is now hindering regional trade, he said, “Pakistan needs fundamental economic reforms to encourage new investment.”

Talking about Pakistan’s engagement with the International Monetary Fund (IMF), he said that “IMF works on a policy framework that is quite tough and the US is a large stakeholder but there are other members also. We want to see Pakistan have a sustainable budget to put on a sound economic system – IMF is generally flexible and can incorporate in times of trouble.”

“We are helping Pakistan increase its resistance towards climate disasters through infrastructural advancement and less dependency on fuel – ultimately leading to the inclusion of green energy,” he said.

Explaining that there are two ways to decrease greenhouse gas emissions, the ambassador said, one way is to enhance infrastructure and the other is to decrease dependency on oil as it also impacts economic growth with global increased prices.

In this regard US Pakistan Green Alliance aims at reducing greenhouse emissions, he said, adding that, “Basically, the US mission wants to encourage local entrepreneurs to look at the enormous untapped potential of trade between Pakistan and the US, where the priority areas would be IT, agriculture and energy sector.”

Speaking at the occasion, LCCI President Kashif Anwar said that the importance of the US in Pakistan’s economy can be evaluated by the fact that the US is its largest export market and caters to around 20% of its exports.

The LCCI president added that the current foreign exchange crisis has forced restrictions on the ability of banks to open LCs.

“Shipping containers are stuck at ports, threatening the supply chain for the manufacturing and industrial sectors. We need the support of multilateral agencies to tide over this difficult time,” said Anwar by enhancing exports to manage trade and current account deficits.

The government has to come up with a concrete strategy for import substitution so that we can expand our manufacturing base and decrease our reliance on imports, he said.