News
Monday, May 12, 2008
Pakistan’s poor exports linked to its negative image
* US expert stresses need for investment treaty
* Says sales tax hampering growthBy Khalid Hasan
WASHINGTON: A United States expert has linked Pakistan’s poor export performance with the negative image of the country that prevails internationally. The observation came through in a paper contributed to a conference on Pakistan’s exports, whose proceedings have just been published by the Woodrow Wilson Centre for International Scholars. Esperanza Gomez Jelialian, executive director of the US-Pakistan Business Council, writes that one key focus of the US business community is to improve Pakistan’s negative perception abroad. She said the US business community has advised decision-makers in Pakistan to devise mechanisms that would enhance Pakistan’s image abroad, and to brand Pakistan as a profitable business destination. Investment treaty: The two countries still have to sign a bilateral investment treaty because of persistent reservations on the part of the US government. The US business community supports such a treaty because of its concerns regarding the internal political situation, deteriorating law and order and uncertainty about the security of investment made, she said. She added that the creation of reconstruction and opportunity zones in Afghanistan and the border regions of Pakistan would be a great step in advancing the two countries’ trade and investment relationship. She said that although Pakistan has made serious efforts to strengthen the intellectual property rights regime, US pharmaceutical companies still stress the need for data exclusivity laws to ensure protection of test data submitted to the Pakistan ministry of health. Taxes: Gomez said US companies operating in the Information Technology (IT) sector in Pakistan wanted a reduction in the 15 percent sales tax on IT and related equipment, including all computer hardware. The tax is hampering growth in a sector that the government is keen to develop. American companies operating in the beverage sector are also seeking tax reduction on carbonated drinks to levels applied to competing beverages. She said the US business community is willing to work with government officials of both the countries to develop constructive solutions on commercial issues that affect both the countries. She said that the US-Pakistan bilateral investment treaty would help attract new investment as well as encourage existing investors to increase their operations. In another contribution to Hard Sell, the Woodrow Wilson volume, former US trade representative for South and Southwest Asia Douglas A Hartwick said in his paper that Pakistan’s impressive growth rate has been achieved despite domestic challenges. He noted that the World Bank had called Pakistan one of the top 10 reforming economies of the world in 2006. The US, he added, enjoys a $5 billion trade relationship with Pakistan and Pakistan remains America’s ninth largest services trading partner. He said, “The United States recognises that the individual pieces of South Asia are progressing economically, but we are also aware that the South Asian economies, in particular Pakistan, could multiply gains with better economic cooperation, integration, diversification and intra-regional trade.”
Courtesy Daily Times