Psychological barrier: Exports to cross $20b mark this financial year
Pakistan to explore Chinese market to capitilise on competitive edge.
ISLAMABAD:
Pakistan’s exports may cross the $20 billion mark this financial year despite a negative impact of gas outages on the industry, said a top official of the Trade Development Authority of Pakistan (TDAP).
Talking to the media on Saturday, TDAP Chief Executive Tariq Puri said that first-half trade figures have depicted a healthy trend and there is a strong possibility that exports will exceed $20 billion by end-June. In six months, goods worth $11 billion were exported against imports worth $19.2 billion, showing a gap of $8.2 billion.
Though the $20 billion mark is significant, it is still behind the 2011 export target of $21.3 billion set in a three-year trade policy in 2009. This year the government did not announce the trade policy based on the 2009 broader policy framework. The 2009 trade policy envisages 10 per cent growth in exports over 2009-10 when exports stood at $19.4 billion.
The industry is facing an acute shortage of gas and power, as most of the industrial hubs remain shut at least two days in a week. This has not only rendered thousands of daily wager earners jobless but is also making it difficult for the exporters to deliver orders to international buyers on time.
The country is facing a daily gas shortage of 800 million cubic feet to 1.2 billion cubic feet, estimates of the ministry of petroleum and natural resources show.
The chief executive of the TDAP, a body constituted to promote the country’s products worldwide, was not sure about the exact impact of gas shortage on the industry. He said that the actual impact of outages will be clear only after trade figures of January are released. Industry experts are estimating a loss of $500 to $800 million per month on account of gas outages in Punjab.
Tariq Puri said that the government has declared 2011 as the ‘year of exports’. However, he could not give a firm answer how the government will tackle power and gas outages and deteriorating law and order situation that our hampering business activities.
He said Pakistan will try to explore the Chinese market, as Islamabad still enjoys a competitive edge in many products over Beijing. Pakistan-China bilateral trade hovers around $7 billion which is heavily tilted in favour of Beijing whose exports stand at over $5 billion.
Puri said that despite a free trade agreement between the two countries, China still has non-tariff barriers that restrict Pakistan’s exports in even those areas where effective duties are zero.
To a question, Puri said the finance ministry was not releasing the Export Development Fund that has created some problems. “Out of the demand of Rs2 billion, the finance ministry has so far released only Rs900 million.”
The fund is collected by levying 0.25 per cent surcharge on all export consignments and is intended for developing projects to encourage exports. He said the finance ministry has deposited the money in the National Bank and is earning 11 per cent interest on that amount.
The office of the Auditor General of Pakistan has recently unearthed misuse of over Rs900 million in the Export Development Fund. Puri said he did not have exact figures of the money being misused out of this pooled amount, as the process of settling the audit objections was going on.
Commerce Secretary Zafar Mahmood, in a meeting of the Public Accounts Committee held on September 1, 2009, said that exporters have been financing projects from their own money while the finance ministry has withheld about Rs7.1 billion from the Export Development Fund to finance the budget.
Published in The Express Tribune, January 16th, 2011.
Pakistan’s exports may cross the $20 billion mark this financial year despite a negative impact of gas outages on the industry, said a top official of the Trade Development Authority of Pakistan (TDAP).
Talking to the media on Saturday, TDAP Chief Executive Tariq Puri said that first-half trade figures have depicted a healthy trend and there is a strong possibility that exports will exceed $20 billion by end-June. In six months, goods worth $11 billion were exported against imports worth $19.2 billion, showing a gap of $8.2 billion.
Though the $20 billion mark is significant, it is still behind the 2011 export target of $21.3 billion set in a three-year trade policy in 2009. This year the government did not announce the trade policy based on the 2009 broader policy framework. The 2009 trade policy envisages 10 per cent growth in exports over 2009-10 when exports stood at $19.4 billion.
The industry is facing an acute shortage of gas and power, as most of the industrial hubs remain shut at least two days in a week. This has not only rendered thousands of daily wager earners jobless but is also making it difficult for the exporters to deliver orders to international buyers on time.
The country is facing a daily gas shortage of 800 million cubic feet to 1.2 billion cubic feet, estimates of the ministry of petroleum and natural resources show.
The chief executive of the TDAP, a body constituted to promote the country’s products worldwide, was not sure about the exact impact of gas shortage on the industry. He said that the actual impact of outages will be clear only after trade figures of January are released. Industry experts are estimating a loss of $500 to $800 million per month on account of gas outages in Punjab.
Tariq Puri said that the government has declared 2011 as the ‘year of exports’. However, he could not give a firm answer how the government will tackle power and gas outages and deteriorating law and order situation that our hampering business activities.
He said Pakistan will try to explore the Chinese market, as Islamabad still enjoys a competitive edge in many products over Beijing. Pakistan-China bilateral trade hovers around $7 billion which is heavily tilted in favour of Beijing whose exports stand at over $5 billion.
Puri said that despite a free trade agreement between the two countries, China still has non-tariff barriers that restrict Pakistan’s exports in even those areas where effective duties are zero.
To a question, Puri said the finance ministry was not releasing the Export Development Fund that has created some problems. “Out of the demand of Rs2 billion, the finance ministry has so far released only Rs900 million.”
The fund is collected by levying 0.25 per cent surcharge on all export consignments and is intended for developing projects to encourage exports. He said the finance ministry has deposited the money in the National Bank and is earning 11 per cent interest on that amount.
The office of the Auditor General of Pakistan has recently unearthed misuse of over Rs900 million in the Export Development Fund. Puri said he did not have exact figures of the money being misused out of this pooled amount, as the process of settling the audit objections was going on.
Commerce Secretary Zafar Mahmood, in a meeting of the Public Accounts Committee held on September 1, 2009, said that exporters have been financing projects from their own money while the finance ministry has withheld about Rs7.1 billion from the Export Development Fund to finance the budget.
Published in The Express Tribune, January 16th, 2011.