India and Pakistan find common ground on upbeat economic outlook
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India and Pakistan find common ground on upbeat economic outlook

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In a rare side-by-side appearance in a debate at the ADB annual meetings, the finance ministers of India and Pakistan sidestepped the normal hostile tone between the two Asian powers to outline how they will both surpass China with 7% annual growth

India and Pakistan will be the stand-out growth stories of Asia with their economic expansion accelerating even as China is slowing, the finance ministers of the two countries claimed on Wednesday.

They issued the upbeat outlook as they made a relatively rare side-by-side appearance at a CNBC debate at the ADB annual meetings in Frankfurt.

Both India’s Arun Jaitley and Pakistan’s Ishaq Dar voiced confidence that their economies could grow at around 7% annually over the coming five years — although Jaitley said that external “headwinds” could upset any precise predictions.

Jaitley deftly fielded a question during the debate about whether the delicate political relationship between the two neighbours could derail their continuing economic expansion.

“We have a history in common but we cannot do anything about our geography,” he quipped. “There are issues that require solutions.”

Dar claimed that the proposed China-Pakistan Economic Corridor would benefit not just those two countries but also their neighbours. He said it would be a “win-win” situation, adding that some Middle Eastern and European countries would also benefit from the boost to regional connectivity.

Pakistan has brought its economy to a situation of “stability” in recent years and now the time has come to focus more on investment and connecting the Pakistan economy more closely with the rest of the Asia region and beyond, Dar said.

China’s Silk Road Fund and the newly-established Asian Infrastructure Investment Bank (AAIB) both aim to help with improving connectivity across the Eurasian continent and on into parts of the Middle East and Africa.

ADB president Takehiko Nakao said that his bank would also play a major role in this regard. The ADB had been closely concerned with aiding connectivity in Central Asia since its inception 50 years ago, he noted. Only this week the ADB and AIIB announced that they would co-finance a new motorway in Pakistan that would help link the country more closely with the outside world.

Indonesian finance minister Bambang Brodjonegoro was similarly upbeat about his country's prospects during the debate. The government was switching its focus from consumption to investment in the wake of the commodity price collapse, he said.

This should pay dividends in terms of continued future growth for Indonesia, he said. “The consumption boom cannot continue.”




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