Experts of Asian Development Bank (ADB) emphasised the need for improvement in infrastructure arrangements to facilitate trade between Pakistan and Afghanistan and India. However, trade facilitation requires harmonising customs procedures, and the regulatory frameworks of the other authorities at border crossings. Linkages need to be established among customs organisations so that they can exchange data, and the export document of one country can serve as the import document of the other.
In a report on "Developing Economic Corridors in South Asia" Sanitary and Phytosanitary (SPS) and other quality standards need to be harmonised to eliminate technical barriers to trade (TBT). Finally, relations between India and Pakistan must be broad-based and guarantee continuing with a liberalised bilateral trading environment. Towards achieving this, ADB report mentioned that the governments must be helped by the business communities and civil society on both sides.
Pakistan has to realise that while additional investment in trade infrastructure is necessary for sustaining economic growth, attention has to be paid to issues that prevent the existing infrastructure from being utilised fully. In overall infrastructure, Pakistan is almost on a par with its regional competitors, but it fares poorly when it comes to organising and managing it.
Pakistan is reforming its public-sector enterprises dealing with nation-wide connectivity, developing a National Trade Corridor (NTC), and opening up the transport and communication sectors to foreign direct investment (FDI). Linking Pakistan to Central Asia, and South Asia through road and rail networks is high on the government's agenda. To facilitate connectivity, a $9-billion program has been initiated for the NTC, which is expected to be completed in the next few years, but may take longer due to fiscal constraints, ADB report added.
According to ADB report, the substantial networking is intended to facilitate connectivity with Pakistan's neighbouring countries, and better integrate the urban and rural economies, small and medium enterprises (SMEs), and urban wholesale, retail, and warehousing sectors with port cities.
Of the $9 billion allocated for the NTC, $5 billion is to be spent on improving highways, and $1.5 billion on modernising Pakistan Railways and extending its lines to the borders with Afghanistan and Iran. The rest is to be invested in improving ports and airports, and providing other facilities to improve bilateral trade. Trade zones are planned along motorways to reduce the cost of doing business, and making Pakistani products more competitive internationally. Improved external logistics would generate a saving in costs of non-factor services estimated at $525 million annually (Government of Pakistan 2007).
Presently, Pakistan is well below the average of many other countries when it comes to achieving a level of connectivity that can supplement economic growth in the long run. Road freight (which carries 95% of cargo) takes four to six days between ports and the north of the country-twice the time it would take in Europe and East Asia. Trucking rates for high value-added commodity traders are higher than in India and Brazil, and the same as the People's Republic of China (PRC) (where the quality of service is better). Rail carries less than 5% of freight, and takes one to two days on the main line (Karachi-Lahore) and up to 16 days (Karachi-Quetta) to deliver upcountry.
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