( iv ) supportive and stable policies. besides full foreign ownership, investors can repatriate their capital, dividends and profits and there is no restriction on the level of royalty payments. foreign investors are eligible for low import duties between 5 and 10 % on plant and equipment and a first year tax allowance on profits of between 50 and 90 % of the cost of plant and equipment. measures have also been taken to introduce an intellectual property rights regime compatible with the wto. rules governing fdi have been significantly liberalized. furthermore, the investment climate has improved as a result of policy initiatives such as the streamlining of procedures required to start a business and the measures taken to minimize the time that businesses spend dealing with government inspections. to facilitate foreign portfolio investment, special rupee convertible account ( scra ) has been established to allow remittances and non - residents to bring money in and out of pakistan. the amount accumulated in this account can be used for purchasing as well as trading shares quoted in the stock exchange as well as other approved securities. foreign exchange regime has also been liberalized and exchange controls have been lifted. business processes are being rationalized and simplified. reforms, both of incentive and administrative regime, have helped pakistan to improve its ranking in the survey conducted by the world bank on ‘ doing business in 2007. ’ pakistan now ranks 51 in the time to import ( which has reduced from 39 days to 19 days ) as trade logistics and customs procedures were streamlined and scores well on the indicators related to starting a business ( 54th out of 175 ) and protecting investors ( 19th out of 175 ). v. growth sustainability and prospects pakistan ’ s real gdp growth rate has risen in recent years, averaging 7. 4 % in the preceding three years. this is well above the long - term ( 50 years ) average growth rate of 5 percent. the strong growth momentum has stressed the productive capacity of the economy as evident in macroeconomic indicators such as rising inflationary pressures and a widening external current account deficit. these developments naturally raise questions regarding economy ’ s potential to sustain this momentum. the current growth momentum in the range of 7 % can indeed be maintained, though this requires : careful calibration of macroeconomic management and removing bottlenecks that are impeding growth and economic diversification. with declining poverty 1 and growing employment opportunities, viability of pakistani market is further enhanced as domestic private consumption has been supported by improved incomes and remittances. to ensure sustainable economic growth, pakistan

strengthen the banking sector and securities markets. directed credit and credit ceilings, administered and subsidized interest rates have gradually given way to market - based allocation of credit and determination of prices. india has become a leader in outsourcing of information technology enabled services. low wages, large english speaking technical manpower, availability of venture capital and networking with the u. s. firms have brought about a major expansion in i. t. exports. pharmaceuticals, health care, biotechnology, research and development are also beginning to attract attention from multinational companies. indian firms are also beginning to acquire firms abroad and are integrating themselves in the global economy. however, other countries in the region are still way behind and have a lot of catching up to do. services sectors account for 60 percent of the output of developed countries and many services are becoming mobile across border due to breakthrough in technology and communication. thus the outsourcing of services is a sensible strategy. these improvements in macroeconomic fundamentals have led to up gradation of credit worthiness of india and more recently pakistan. both the countries have established access to international bond market at fine pricing. it will, therefore, be fair to surmise that economic fundamentals have improved to a very large extent in all the south asian countries in the last decade or so. broad political consensus on the content and direction of economic policies and their credible and consistent pursuit should provide some signal to the markets that the south asian economies can be relied upon in the exchange of goods and services and inflow of capital. agenda for the future. however, the challenges ahead and tasks for economic managers in the region are simply daunting. sri lanka and india have almost one quarter of their population living below the poverty line. the estimates for bangladesh are in the mid 40 percent, while pakistan has one - third of its population living below the poverty line. unemployment rates are quite high and human development indicators are dismally low. moreover, these task have to be pursued in the context of a more volatile economic environment - both domestic, as well as, international. capital inflows and outflows have much greater potential to destabilize markets, exchange rate and interest rates. technological, communication and media revolution especially the satellite television and cable channels have raised the expectations of the common man through the demonstration effect of conspicuous consumption by powerful and affluent classes. these expectations are placing enormous pressures on the ruling classes for providing access to basic necessities of life to the majority of the population