Commerce minister says exports decreased by $4.5b from 2012-15. PHOTO: ADB
According to the data, the second most negative trade balance is with United Arab Emirates at $4.8 billion while it is $2.6 billion with Saudi Arabia, $1.9 billion with Indonesia, $1.6 billion with Kuwait and $1.35 with neighbouring India.
Similarly, it is $724 million with Malaysia, $360 million with Australia and $228 million with Iran. The last three countries among the list of 84 for negative trade are British Virgin Islands with $12 million, Cocos (Keeling) Islands with $4 million and Greenland with $1 million.
Steps for improvement
The commerce ministry stated in its reply that in order to improve the balance of trade, the ministry is making efforts on three fronts: trade diplomacy, promotion and policymaking. The three steps include diplomacy through unilateral and reciprocal concession with partner countries, it explained.
The steps include promoting trade through holding business exhibitions and sending delegations along with improving export policy with competitive measures.
Besides, the ministry is currently negotiating trade agreements with Thailand and Turkey to secure enhanced market access in these countries. The ministry is also in the process of reviewing Free Trade Agreements and Preferential Trade Agreements with China, Malaysia and Indonesia, among other countries, to make trading more effective from Pakistan’s perspective.
Decline in exports
In reply to another question, trade and commerce minister Khurram Dastagir Khan informed the Lower House that Pakistan’s exports have decreased from $24.58 billion in 2012-13 to $20.8 billion in 2015-16.
International recession and decrease in demand were cited as several reasons for the decline in exports.
Market concentration
He also stated that due to market concentration, Pakistan’s exports lack diversification as more than 50% of exports rely on only six markets: USA, China, Afghanistan, UAE, United Kingdom and Germany.
The minister also maintained that Pakistan’s exports are dominated by primary and intermediate goods rather than value-added finished products. For instance, 74% of food items and 40% textile exports are primary commodities. “There is minimal value enhancement and value creation through branding and design innovation,” he said in his reply.
Appreciated currency
Khan also stated that since November 2013, many currencies around the world significantly depreciated such as the Indian Rupee (7%), Chinese Yuan (8%), South Korean Won (10%), Thai Bhat (11%), Euro (20%) and Brazilian Real (51%). In contrast, the minister said, the Pakistani Rupee has appreciated by 3% during the same period which made Pakistani exports less competitive.
He also stated that the overall economic meltdown, shift in demand, change of taste and preferences for products and price hike are among the exogenous factors for the decrease in exports.
Published in The Express Tribune, September 6th, 2016.
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