Trade, not aid

PRESIDENT Asif Ali Zardari's contention that the key to Pakistan's economic development is trade, and not aid, is absolutely valid and deserve serious consideration by our trading partners. He was addressing a group of economists in Islamabad on Tuesday. Strictly speaking, aid does not help sustain the development process. A substantial part of it is spent on making administrative arrangements related to the projects to be executed and hiring foreign consultants, who generally belong to the country giving the aid, thus depriving the recipient of that much amount. Trade, on the other hand, generates production activity, creates jobs and contributes to GDP growth. The benefit spreads to society as a whole. No doubt the present financial crisis, which is made worse for Pakistan by the influx of displaced persons from the troubled Malakand Division, renders it necessary for Pakistan to ask for humanitarian assistance. Therefore, it should not be confused with the logic behind the President's demand for greater access to foreign markets, particularly in the Western countries, which have the potential to absorb Pakistani goods in much higher quantities without much disturbing the balance of imports from other trading partners. Pakistan has for long been trying to convince the Western countries to provide its goods greater access to their markets to speed up the process of development that would, in the long run, prove to be a bulwark against extremist tendencies. But somehow neither the US nor other Western countries have shown their willingness to oblige. Pakistani officials are meeting their counterparts from the European Union on June 17 in Brussels, in which it is expected that the issue of a free trade agreement would be taken up. Since the international community realises the dangers Pakistan and, indeed, the entire world face in rooting out militancy, one hopes that the EU agrees to sign it.

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