WTO and Pakistan’s Construction SectorIPSweb
The World Trade Organization (WTO) that succeeded General Agreement on Tariffs and Trade (GATT) in 1994 now encompasses almost every sphere of life.
Policy Perspectives, Vlm 3, No.1
[The World Trade Organization (WTO) that succeeded General Agreement on Tariffs and Trade (GATT) in 1994 now encompasses almost every sphere of life. The whole of international trade, goods and services both, is now governed by WTO. Classified as one of the twelve service sectors, under WTO’s General Agreement on Trade in Services (GATS), construction sector presents an immense potential for Pakistan. Pakistan can capitalize its asset of hardworking, cheap and abundant work force, coupled with some 84,000 engineers, 22,000 licensed constructors and 1000 registered engineering service providers. This important sector has taken a steep plunge during the last two decades. Its total share in GDP went down from 4.2 per cent to just little over 2.4 per cent currently.
The problems plaguing Pakistan’s construction sector include financial instability of local constructors and denial of due opportunities both in terms of independent contracts and joint ventures from the national government. The constructors find it too hard to compete with the international competitors, both at home and abroad. Most of the major contracts offered by the local authorities go to the foreign bidders, curbing opportunities for local constructors. Despite some inroads through individual initiatives, Pakistani national companies face tough times overseas in the absence of necessary support. The binding rules and regulations of WTO offer a number of opportunities on the one hand and pose considerable challenges on the other. An aggressive approach is needed to develop this important sector of national economy, to enable to brave the challenges and benefit fully from the opportunities afforded in the new global scenario. – Editor]