KARACHI: Pakistan is all set to miss its over-ambitious export target of $35 billion by June 2018, which the federal government set in the three-year Strategic Trade Policy Framework 2016-18, say high-ranked officials.
After failing to meet the goal in three years, the government will try to achieve the target in the new trade policy but this time the timeframe will be for five years from 2019 to 2023.
“We can push exports above $36 billion in the next five years,” declared Ministry of Commerce Director General Trade Policy Nauman Aslam.
After a drop in exports over the past three years, the shipments have recovered at an average pace of 10-11% per month since the beginning of current fiscal year in July 2017.
“If the pace of growth is maintained in remaining months of the year, then Pakistan’s exports will reach $23 billion by the end of current fiscal year,” Commerce Division Secretary Muhammad Younus Dagha said.
They were speaking at a consultative session on the Strategic Trade Policy Framework (2019-23), jointly organised by the Ministry of Commerce and US Agency for International Development (USAID).
Aslam said exports of $36 billion would be achieved if the current average growth of 10-11% was maintained in all months throughout the next five years.
“This (10-11% growth) is a very moderate approach. We have a lot of potential and…can achieve a higher growth of 15-20% (per year),” he said.
He acknowledged that Pakistan would miss the $35-billion export target this year mainly due to delay in implementation of most of the policy initiatives and partly due to nine-month delay in announcement of the policy.
Major causes of the policy failure are lack of diversification of exports, little innovation and value addition in export goods, insignificant research to know latest consumer needs and failure to find new markets.
“Seventy per cent of exports comprise three traditional products including textile,” Aslam said. Secondly, the country mostly exports commodities in bulk instead of shipping them in packages.
“Around 74% of food items and 40% of textile goods are exported in the form of commodity. Value addition may attract higher export values,” he suggested.
Free trade agreements
The DG trade policy said a review of free trade agreements (FTAs) with two countries and signing of FTAs with more countries were on the cards with the objective of reviving exports under the new trade policy.
FTAs with China and Indonesia are being reviewed these days whereas talks have been going on with Turkey and Thailand for free trade deals which are believed to give a boost to trade with them.
Besides, Pakistan is searching for new markets in countries and regions like Australia, China and Africa. “Look Africa Plan and Emerging Pakistan are some of the initiatives of the Ministry of Commerce,” he said.
Commerce Secretary Dagha said the new trade policy would promote meat exports and in that regard the government would soon announce a package for the poultry industry.
The policy will also promote those sectors that have been under pressure due to liberal imports like that of steel.
He pointed out that the government had addressed exporters’ concerns through rupee depreciation against the dollar in December 2017 when the State Bank of Pakistan let the rupee weaken 4.8% to Rs110.64.
The depreciation, along with the Rs180-billion PM export package, has started reviving exports and the trend may continue in coming months.
“Initial reports suggest the growth in exports (in December 2017) was much better (than the 10-11% average so far this year),” he said.
For the first time in history, Pakistan is organising a buyers’ conference in Islamabad to know about their demands and expectations.
“We have been consulting with exporters and importers to address their grievances and to learn what they want. This would be for the first time Pakistan is inviting buyers,” he said.
Published in The Express Tribune, January 6th, 2018.
Textile bodies demand cut in input costs as long-term relief
Chairman says it will help revive exports, reduce trade deficit
Millers’ association in Punjab demands similar incentive amid threats to suspend crushing
More in Business