Professor of Economics at the Lahore School of Economics (LSE), Dr Azam Chaudhry, said here on Friday that Pakistan has still not been given the same level of market access to China as the ASEAN countries as the Chinese tariffs on Pakistani goods tend to be higher than those on goods from the ASEAN countries.
"The level of exports in the sectors benefiting from lower Chinese tariffs is increasing though it has not increased as a percentage of Chinese imports which means that as Chinese imports have grown, Pakistani exports have not been able to significantly benefit from this trend, consequently, the higher level of exports in these potentially benefiting sectors has led to an increase in employment in these sectors," he added.
Professor Chaudhry, who is also Dean of the Economics at the LSE, highlighted these issues in his paper titled "Pakistan's Experience with the Pakistan-Chine Free Trade Agreement: Lessons for CPEC" at the 13th International Annual Conference on Management of the Pakistan Economy held here under the aegis of the LSE.
The theme of this year's conference was "Igniting Technology led growth in Pakistan: Role of Monetary, Fiscal and Investment Policies". The two-day event was devoted to discussions on past successes and constraints on technology-led growth and to draw insights on how macro and micro level policies can contribute to accelerating economic growth in Pakistan.
The author provided fresh insights on Pakistan's experience with the Pakistan-China Free Trade Agreement (FTA) to draw policy related conclusions for the CPEC-related initiatives. The author tested the impact of the last major economic agreement between the two countries, which was the 2006 Pakistan-China Free Trade Agreement (FTA). The study found a significant impact of this trade agreement on the amount of trade between two countries, however, it also pointed out its suboptimal consequences in the context of Pakistan's growth strategy.
The author found a positive relation between Pakistan-China FTA and imports from China and a negative relation of this trade agreement with the productivity of the firms and value added in these sectors with adverse consequences for the economy, especially on the incentives of the producers in the country.
The rigorous analysis was followed by some interesting policy recommendations for CPEC-related industrial initiatives, such as, gaining the same level of tariff concessions from China as received from the ASEAN countries, promoting joint ventures between the Pakistani and Chinese investors, making the conscious decisions, which sector can lead to the greatest increase in value added, and which sectors have the greatest potential to increase exports.
Professor Azam Chaudry called for developing a labour policy that enables the manufacturing sector to switch from low skilled to high-skilled labour. Assistant Professor Social Sciences Department at SZABIST, Dr Mehak Ejaz, in her work with Dr Kalim Hyder, senior economist, Monetary Policy department, State Bank of Pakistan, analyzed the presumption whether some groups are more vulnerable to business cycle shocks than others, and found that relative to males, females face higher risks when exposed to shocks. The index-based analysis revealed that females are the most vulnerable part of the society. Further, the new entrants and about to retire workers are more vulnerable to economic shocks. Similarly, while low educated females are less vulnerable to the economic shocks, graduate and higher educated females are more vulnerable. Others who spoke on the second day of the conference included Dr Tayyab Shabbir, Dr Pervaiz Tahir, Dr Rajah Rasiah, Shujaat Mubarik, Dr Hanns Pichler, Dr Kumail Rizvi and Sadia Hussain.