Greater market access US envoy sees passage of RGST bill

The US Ambassador Cameron Munter on Monday expressed the hope that Parliament would pass the RGST legislation and said that Obama Administration was making effort for greater market access to Pakistani products.In a wide ranging speech delivered at the Karachi Stock Exchange, he also called upon Pakistani authorities to approve proposals for fixing the energy sector on a fast track and emphasised the need for reducing corruption and increasing transparency. “Let us not kid ourselves, this is not easy.This legislation (RGST Bill) is critical to enabling the private sector to grow, and create the jobs and profits Pakistan needs to succeed over the long term,” said Munter. “We have no illusions, that this legislation will not resolve Pakistan’s fiscal situation, but it is an important first step as the Government of Pakistan aligns its capacity to raise revenue with its need to boost security and development spending,” he said. He was supportive of including agriculture, a sector that constitutes one-fifth of Pakistan’s GDP, as part of Pakistan’s effort to expand the narrow tax base. But he noted that this is also a political question and not so easy. He noted that Pakistan’s tax-to-GDP ratio is less than 9 per cent, one of the lowest in the world.“The tax ratio is a problem because there are many prosperous people in Pakistan who can afford to pay taxes but who refuse to do so or are not required to do so by law,” observed the US ambassador. Reaching out to the business community, Mr Munter said the US “wants to help you succeed, to increase your sales, create more jobs, and expand your reach in regional markets, as well as the United States”. Achieving sustained economic growth and prosperity for Pakistan’s citizens depends on governmental economic policies providing the base for the private sector to succeed, he added. He called upon the business leaders to actively engage political leaders in Islamabad because “you are the ones who they need to hear from about what steps are necessary to take and the same is true for your provincial leaders here in Sindh”. “If you are having trouble getting your message heard, and you think the United States would support it, please let us know. If we agree we will work to amplify the message to everyone’s common good”, said the US ambassador hinting at the patronizing leverage Washington has over the government here. He acknowledged that Reconstruction Opportunity Zone proposal, which would allow President Obama to designate zones to produce goods that could be exported dutyfree to the United States, has been the source of some frustration. “We in the administration remain committed to the ROZs and are hopeful that the new Congress will pass the legislation in the coming year.” The US ambassador noted that Pakistan’s industrial sector has been particularly hard hit by continuing electricity and gas shortages. “Another reason that Pakistan must fix the energy sector is because it must eliminate government subsidies that drain the government budget. This difficult situation nevertheless provides two key opportunities which our governments and private sectors should seize.” In the context of energy sector issues he said that American and Pakistani partner companies have proposals pending with the government to build plants to import liquefied natural gas, electricity generation plants — including an agreement signed last month to build a $150 million wind power plant in Sindh’s Gharo Corridor and a full range of other investments.