Foreign Trade, FDI, and Capital Flows Study

117 items available

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Digital Pakistan: A Business and Trade Assessment
(World Bank, Washington, DC, 2020-05) Rizwan, Nadeem; Saez, Sebastian; van der Marel, Erik
This report analyses the recent trends in Pakistani Information Technologies (IT) and InformationTechnologies enabled Services (ITeS), as well as obstacles confronted by firms. The authors assess the importance of trade costs as a barrier to services growth and development in Pakistan’s domestic market and to seizing the opportunities of global trade. The report also aims to understand and examine the impact of obstacles (i.e., trade costs) confronted by firms. These obstacles increase the costs of selling services and may reduce capacity to compete both in the local market (Pakistan) as well as overseas (exports). These obstacles include direct costs generated by policy barriers that limit market entry, but can also include infrastructure deficiencies, geographical location, and institutional capacities, and/or obstacles imposed by regulatory measures. Among the latter obstacles, examples include difficulties in accessing the information necessary to operate in a market, the predictability and stability of the business environment in a market, and the quality of the decision-making process and administrative procedures of competent authorities in the domestic and export markets. The focus of the report is the trade costs confronted by IT and ITeS firms. IT and ITeS operations are the backbone to provide digital services, digital goods and depend on digital technologies, conform an integral part of the overall ecosystem. The report relies on a survey conducted on 782 IT and ITeS firms across different cities. The objective of the survey was to examine the importance of these factors for Pakistani firms and to provide advice to policymakers. To complement the survey results, the main findings were discussed in focus group structured interviews. Firms interviewed covered different services activities beyond software companies and included both exporters (534 firms) and non-exporters (248 firms), reflecting the export competitiveness as well as domestic competitiveness of Pakistan's IT services sector. The analysis aims to improve our understanding of Pakistan's IT performance and the obstacles confronted in this field.
Import Duties and Performance: Some Stylized Facts for Pakistan
(World Bank, Washington, DC, 2020-05) Varela, Gonzalo; Gambetta, Juan Pedro; Ganz, Federico; Eberhard, Andreas; Franco, Sebastian; Lovo, Stefania
This note discusses the role that import duties have in Pakistan’s economy, and their links with export competitiveness. Import duties play two key roles. First, they are a source of tax revenues for governments. Second, when imposed on a product, they create a wedge between its world price, and the price paid domestically (as well as a wedge between its domestic price, and the price of its substitute in the domestic economy). These wedges affect the allocation of resources. They divert resources away from export markets - in which firms will only fetch world prices for the product - and into the domestic market, effectively creating an anti-export bias. Thus, an import duty is implicitly an export duty. When these duties are applied on inputs that different sectors use to produce, the duty induces firms to substitute away from that - now more expensive - input, and into other substitutes, thus affecting the otherwise optimal technological choice of firms, as well as increasing their production costs. This note is organized as follows: the first section presents a snapshot of import duties in Pakistan. The second section empirically examines the ways import duties induce an allocation of resources that is different from the one that will be obtained without the duty distortion. The third section looks at the role of tariff policy in the context of the COVID-19 (Coronavirus) pandemic. The fourth section briefly describes the recent changes in the tariff policy institutional arrangement. The fifth section concludes and provides policy recommendations moving forward.
Modernizing Trade in Pakistan: Policy Reform Handbook
(World Bank, Washington, DC, 2019-09) World Bank Group
This handbook intends to be a resource for those interested in trade policy reform, in Pakistan and elsewhere. It arose from the Pakistan trade and investment policy program (PTIPP). The PTIPP was designed to work on trade, competitiveness, and gender in Pakistan. This handbook focuses on two pillars of the PTIPP: trade policy and trade facilitation. The objective of the trade policy pillar was to develop a comprehensive medium-term regional trade strategy underpinned by high-quality analysis, in line with international good practice. The objective of the trade facilitation pillar was to reduce the time, cost, and documentation required to process exports and imports through key border posts, leading to a substantial increase in the volume of goods traded. To achieve these objectives, the PTIPP engaged with policy-making institutions, the private sector, including female entrepreneurs, and government to promote international trade, investment, gender equality, and regional integration. The authors focused on producing a document that not only lists results and recommendations but also guides the reader through how the analysis was conducted and how the recommendations were reached. This handbook also provides a set of guidelines for analyzing competitiveness in any country and shows how the lessons learned in Pakistan can apply to other economies. It will therefore be useful for teams conducting competitiveness analyses in other countries and regions.
Pakistan: Unlocking Private Sector Growth through Increased Trade and Investment Competitiveness
(World Bank, Washington, DC, 2018-10) Rocha, Nadia; Varela, Gonzalo
Evidence suggests that Pakistan has the potential for much faster and more diversified economic growth. Energizing trade can help Pakistan to realize its growth potential. Pakistan’s inward-oriented trade policies have had the effect of stalling Pakistan’s integration into regional and global value chains (GVCs). Pakistan’s failure to reform its trade policy to better foster export competitiveness can be attributed in part to institutional fragmentation within the government. This fragmentation has resulted in different agencies sometimes working at cross purposes. Efforts to reduce tariffs have been offset by the introduction of alternative protection instruments such as regulatory duties (RDs) and firm-specific special regulatory orders (SROs). In addition to tariffs, RDs and SROs, other obstacles to global integration include a heavy regulatory burden and perceived risks to investing and operating in the country, which have hurt efforts to attract foreign direct investment (FDI). Growth and competitiveness are also inhibited by inefficient trade facilitation policies, weak logistics services, and underdeveloped infrastructure. These constraints have made it difficult for Pakistan to fully exploit its proximity to China, a trade powerhouse, with which it has a free trade agreement. All in all, the anti-export bias of Pakistan’s trade policy has made it more difficult for outward-looking firms to grow by accessing global markets. A series of actions in the areas of trade policy, trade facilitation and connectivity, and institutional coordination could potentially stimulate Pakistan’s growth through increased trade and investment competitiveness. Integration with other countries in the region and neighboring regions, particularly East Asia, will allow Pakistan to diversify both its product basket and markets. Finally, full normalization of trade relations with India would allow Pakistan to benefit from India’s fast growth and promote complementarities, including valuechain activities and investment potential.
Pakistan: Export Diversification and Trade Policy
(Washington, DC, 2012-06-26) World Bank
Pakistan’s trade indicators reflect low outward orientation, concentration on low value added activities and an undiversified product mix which out of line with the fastest growing areas of world demand. The export share of Gross Domestic Product (GDP) has remained low and falling—fro