Peaceful relations with the neighboring countries and greater cooperation in areas of trade and transit will lay the solid foundations. 5. Productivity increase in agriculture and industry: Compared to the countries in East Asia and China that should serve as the benchmark for Pakistan’s competitiveness we lag behind in total factor productivity as well as productivity gains in commodity producing sectors.
Good news is that banks’ lending attitude seems to be gradually becoming far more accommodative than in the previous recoveries. This shows that major banks in Japan have made good progress in  2  BIS Review 41/2004  solving non-performing loan problems. The resultant improvement in bank balance sheets is expected to enhance their loan capacity.