KARACHI: The World Bank has noted in its report that trade between Pakistan and India could increase to $37 billion from existing only 2 billion dollars if the two South Asian countries ready to reap the benefits of shared land borders.
South Asian countries are yet to reap the benefits of shared land borders, the World Bank report adds. While Pakistan and India collectively represent 88 percent of South Asia’s gross domestic product (GDP), trade between the two countries is only valued at a little over $2 billion. This could be as high as $37 billion, the World Bank said in the report “A Glass Half Full: The Promise of Regional Trade in South Asia”.
Sanjay Kathuria, a World Bank lead economist and author of the report, said that it was cheaper for Pakistan to trade with Brazil than with India. 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, Kathuria said. “By reducing man-made trade barriers, trade within South Asia can grow roughly three times, from $23 billion to $67 billion,” Kathuria added.
The report stated that regional trade can create many more jobs and make the country prosperous if trade barriers with South Asia are removed, says the report. Pakistan’s trade with South Asia accounts for only 8 percent of its global trade, despite the region being the world’s fastest growing. However, intraregional trade in South Asia is among the lowest at about 5 percent of total trade, compared with 50 percent in East Asia and the Pacific.
The recently-launched Glass Half Full: The Promise of Regional Trade in South Asia report documents what needs to be done to realize the full trading potential in South Asia. It was launched at the 11th South Asia Economic Summit, hosted by the Sustainable Development Policy Institute in Islamabad. It identifies four critical barriers to regional trade: tariffs and para-tariffs, real and perceived nontariff barriers, connectivity costs, and a broader trust deficit.