In the Financial Year 2014–2015, which marks the completion of two decades of the WTO trading arrangements, Pakistan registered the highest ever trade deficit of USD 22.95 billion. Mehnaz Bhaur conducts a trend analysis and finds out that the country’s trade deficit is a systemic issue characterized by a gradually widening trade gap, which has undergone a further decline in the previous year.
If this trend is not managed, Pakistan’s economy will undergo a downward spiral marked by low exports, high imports, low productivity, decline in growth, lack of investment, increased debt, and extreme poverty. The situation can be compounded by the evolving demographic realities with the population projected to double in thirty-five years, resulting in a large unemployed youth presenting a potential risk of conflict in the country.
Where some benefits of trade liberalization have been registered; those are not substantial to offset the challenges presented by the rising import bill and sluggishness of the economy. Pakistan needs to adopt a comprehensive set of policy actions concentrating on creating a stable macroeconomic framework, devising a credible business-friendly environment and developing skilled youth to be able to realize the promises of trade liberalization linked with sustainable growth outcomes.Global Trade and Customs Journal