ISLAMABAD: Federal Minister for Finance, Senator Muhammad Ishaq Dar said Monday that “trade not aid” was the guiding principle for the government.
Speaking at Air Headquarters, on the topic “Trade, Aid and Development: Lessons for Pakistan” the minister said the government fully realizes the potential of trade development adding the global gains from trade liberalization are enormous ranging from US $ 290-460 billion every year.
He said that many developing countries through multi-lateral institutions have tried substituting foreign aid to fill the savings-investment gap.
Research indicates that such an approach may have induced growth in the short term, but to sustain economic development and growth over the long term, Trade and not Aid was essential, he added.
The Minister said looking back over the last four decades and focusing on East Asia and China, one can see that trade has been instrumental in surmounting poverty.
The increased integration into the world economy through trade has positively impacted growth.
The Minister said, China has carried out reforms to capture international markets.
Having emerged as world’s largest manufacturer, China’s trade has expanded from US $ 59.14 billion in 1979 to US $ 3.5 trillion in 2013.
This massive increase in trade has positively impacted growth which is evident from the fact that economic growth has correspondingly been rising with increase in trade.
The Minister said Prime Minister Nawaz Sharif on 27th December 2013 stated that one of the key priorities of Pakistan’s foreign policy is to focus on “trade and not aid”.
As a result of globalization, the increasing integration of trade, finance, people, and ideas in one global marketplace has enhanced international trade and cross-border investment flows.
The Minister observed that benefits of free trade as opposed to aid in the context of economic development are enormous for those countries that opt for trade rather than aid.
He said the ongoing consultations at Doha multilateral trade negotiations attempt to provide opportunities to developing countries to get a larger share of global trade.
Talking about Internally Displaced Persons (IDPs), the minister said their rehabilitation was top priority of the government.