World Bank warns Pakistan against rising trade gap: $46 million loan deal signed

The World Bank has shown concern over Pakistan''s soaring trade deficit and cautioned, if not capped it may hurt country''s economic growth sustainability.
John Wall, the World Bank''s Country Director while speaking to newsmen here on Wednesday after the signing of $46 million loan for Punjab Land Records Management System Project (PLRMSP), suggested Pakistan to take appropriate measures to augment its exports to achieve sustainability in economic growth.
He also said that though trade deficit is considered as a good omen for growing economy (rapid growth) yet in Pakistan''s case it is very large and required immediate attention. Besides, he also advocated tight monetary policy to check inflation. About the decline in textile exports, he described China as a cause being a big competitor in this sector.
While, on the other hand, the economic managers are of the view that Pakistan is enjoying an economic boom and the trade deficit was manageable. There is no threat to economic growth sustainability, they added.
It is important to note that Pakistan''s trade deficit during July-Jan 2006-07 has increased to $7.6 billion from $6.5 billion recorded in corresponding period last fiscal, depicting an increase of 16.92 percent. During the period under review, exports stood at $9.6 billion and imports $17.2 billion.
The $46 million project agreement was signed by Akram Malik, Secretary Economic Affairs Division, Shahid Mahmood, Secretary Planning & Development Department Punjab and John Wall.
It was the last official assignment of the Bank''s out-going country director, as he would retire soon after spending seven and half years in Pakistan.
The loan would come from the Bank''s concessionary International Development Association (IDA) with 35 years maturity and a 10-year grace period.
The project aims at improving land record service delivery in Punjab contributing to long-lasting tenure security thus creating an enabling investment environment.
According to World Bank, it would help in reducing litigation and introduce a reliable land registration procedure to farmers and other end users in the most agrarian province of Pakistan.
Under the project, service centres would be established where land records would be maintained and made available to the public in digital form, pilot linkages will be established between the land records system and the system for registration of deeds.