A US Congressional Research Service (CRS) report says Pakistan's macroeconomic reforms under President General Pervez Musharraf have achieved notable successes. The report, as updated on July 26 this year, referred to a September 2004 country brief of the World Bank, saying that Pakistan's macroeconomic situation was "rapidly improving".
The CRS report said attempts at economic reform historically have floundered due to political instability, but the Musharraf government has been notably successful.
It said participation in the post-September 2001 anti-terror coalition eased Pakistan severe national debt situation with many countries, including the US, boosting bilateral assistance efforts.
The report said in January 2005, a top International Monetary Fund official congratulated Pakistan for its "successful implementation of reforms that led to "impressive turnarounds" in macroeconomic trends.
In February, the World Bank president praised Pakistan's "terrific" economic progress, but emphasised that Pakistan "has a long way to go in terms of achieving its human development goals," the report said.
Long-term economic outlook for Pakistan has improved a lot in recent years, the report says, adding the country's total liquid reserves topped $12 billion by mid-2004, an all-time high and an increase of more than 400 percent since October 1999.
Foreign remittances in 2003 exceeded $4 billion, nearly quadrupling the amount in 2001. Inflationary pressures grew at least partly due to increased oil prices in 2004, resulting in an annual rate of 7.4 percent but may ease in 2005 and 2006.
The report said Pakistan's resources and comparatively well developed entrepreneurial skills hold promise for more rapid economic growth and development in coming years.
This is particularly true for Pakistan's textile industry, which accounts for 60 percent of Pakistan's exports.
Analysts pointed to the pressing need to further broadening the country's tax base in order to provide increased revenue for investment in improved infrastructure, health, and education.
The CRS report said the United States is by far Pakistan's leading export market. In 2004, total US imports from Pakistan were worth $2.87 billion, up 14 percent over 2003 and more than half of this value came from the purchase of cotton apparel and household goods.
According to the report, US exports to Pakistan during 2004 were worth $1.8 billion, more than twice the 2003 value, led by a tripling in sales of machinery and transport equipment.
Quoting 2005 report of the US trade representative, the CRS document said Pakistan has made "progress" in reducing import tariff schedules, though some trade barriers remain.
Some items, the report adds, are banned from importation on religious, environmental, security, or health grounds.
The report, citing trade losses in 2004 due to copyright piracy, noted that Pakistan has taken a number of legislative and legal measures to overcome the problem, particularly piracy of music CDs.
In the context of pharmaceutical industry, the report noted some impediments to US manufacturer profitability.
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