Currently, Pakistan’s regional trade is working at a sub-optimum level of US$18.5 billion. There is a need to enhance productivity through the efficient allocation of capital and labour. Regional connectivity is hindered by several factors like misallocation of resources, limited competition, barriers to entry in the market, and a lack of openness to the region, all acting as impediments to growth.
To increase regional connectivity and export growth, the country needs to develop a growth strategy to make Pakistan a major regional trade hub, acting as a logistics corridor connecting the two economic powerhouses in its neighbour, India and China. Pakistan needs to devise a growth strategy that has an integrated global value chain.