Pakistan's Investment Climate : Laying the Foundation for Growth, Volume 2. Annexes
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Washington, DC
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Pakistan has faced a seismic shift in
its global and domestic economic landscape which until
recently limited policy options to address investment
climate concerns. External shocks, internal policy inaction
and political turmoil placed the country in a precarious
economic condition, calling on the authorities to take a
hard look at the policy choices ahead. Macroeconomic
instability resulting in inflation, exchange rate
depreciation, and a rapid depletion in foreign reserves
became acute in 2007-08, with the adjustment accompanied by
a reduction in investment, export and output growth. The
recent slowdown in global demand for world trade along with
supply shocks from the domestic economy has exacerbated an
already monumental challenge for Pakistani firms to prosper
and policy makers to respond. As external market conditions
and Pakistan's own stabilization program temper
economic expectations, opportunities abound to lay the
foundation for expansion. Given Pakistan's geopolitical
positioning, growing labor participation rates, and
improvements in the standard of living, significant poverty
outcomes can be achieved through sustained economic growth.
Even, in the short run, during periods of slower growth,
banking system weakness, and corporate distress, Pakistan
can take the opportunity to position itself for the
inevitable global rebound. Concerted efforts now can improve
firm level productivity, fluidity of markets for labor,
capital and land, as well as goods, and therefore, better
resource use and global competitiveness.
Palabras clave
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