Pakistan Embraces Economic Reforms

BRUSSELS -- The international community on Friday welcomed Pakistan's economic reform drive and pledge to boost tax collections, crucial steps if the country is to overcome terrorism and rebuild after summer floods that have affected 20 million people.

A high-level meeting of the 24-member Friends of Democratic Pakistan agreed "a safe, secure, stable and prosperous Pakistan" is in the interest not just of Pakistan itself but the rest of the world, EU foreign affairs chief Catherine Ashton said.

The group was formed in 2008 before the summer floods compounded Pakistan's domestic situation, which is troubled by terrorism seeping in from neighboring Afghanistan. It is not a donor group, but works with Islamabad to push through long-term economic and institutional reforms.

The floods began in late July during unusually heavy monsoon rains. They eventually covered one-fifth of the country affecting around 20 million of Pakistan's 175 million people. Nearly 2,000 people died, while millions were left homeless, according to the United Nations.

On Thursday, U.S. Secretary of State Hillary Rodham Clinton urged Pakistan to ensure wealthy Pakistanis contribute to helping the country overcome the devastation caused by the floods by improving tax collections.

"It is absolutely unacceptable for those with means in Pakistan not to be doing their fair share to help their own people," she said. "The international community can only do so much."

Pakistani Foreign Minister Shah Mahmood Qureshi acknowledged to reporters after Friday's meeting "there is a recognition" not enough people pay taxes in his country. He said he government was working hard to remedy that.

The EU has promised tax breaks to help Pakistani exports of textiles. These account for 60 percent of all of Pakistan's exports.