Pakistan targets five countries for greater market access

Dawood says economy on right track as exports rise, imports fall

ISLAMABAD: The increase in production of value-added goods is a good sign and rise in exports and decline in imports shows that the economy is on the right track, said Adviser to Prime Minister on Commerce Abdul Razak Dawood.

Speaking at an event of the Lahore Chamber of Commerce and Industry (LCCI), the adviser said 14% rise in exports and 18% fall in imports in July 2019 compared to the previous year showed that things were now moving in the right direction.

"We are rectifying things on the economic front that went wrong in the past," he remarked.

Giving an overview of the economy, Dawood said Pakistan had a trader-led import and consumption-driven economy in the past. "Uncontrolled imports, under-invoicing, unsupportive tariff structures, and an irrational exchange rate led to the deterioration of the economy."

He pointed out that big industries had stopped manufacturing and had started importing because there was 5% duty on finished goods as compared to 20% on the import of raw material.

The adviser was of the view that it was the government's responsibility to correct things otherwise sufferings would continue. "Our survival lies in exports. It is the government's responsibility to give businessmen market access, China has agreed to extend duty-free access on 313 tariff lines," he added.

Sharing future plans, Dawood said, "I have targeted five countries, ie USA, Canada, Japan, South Korea and Australia to get market access for Pakistani businessmen."

Engineering and other sectors were being focused for stepping up exports and it was good to see that Pakistan was exporting tractors to Mozambique, Tanzania, Kenya, etc, he said.

Speaking on the occasion, LCCI President Almas Hyder said the current account deficit was the biggest problem of Pakistan as there was a huge gap between imports and exports that created issues like currency depreciation, rise in the interest rate and others.

He said exports were of paramount importance in Pakistan's economy as these were the main source of revenue generation and employment creation. Exports were also imperative for maintaining the balance of payments stability, he said.

"As Pakistan aims to become a competitive economy in the region and grow more than 7%, it is imperative for us to enhance our export revenues to deal with multi-dimensional economic challenges that have confronted our nation," the LCCI president suggested.

He said it was, however, a bitter reality that Pakistan was far behind regional economies in export revenues. "While our exports are stagnant around $24 billion, the exports of Bangladesh have surpassed $40 billion. Turkey, whose exports were comparable with Pakistan in the 1980s, is now fetching more than $165 billion in export revenues. Vietnam's export revenues stand at $290 billion."

He underlined the need for a long-term integrated export strategy that would encourage investment in manufacturing for producing an export surplus, encourage value addition and resolve long-standing issues like competitiveness and productivity.

Special focus in the new export strategy should be given to technology-intensive industries with immense export potential which included sports goods, surgical instruments, auto parts, chemicals, value-added textile, ceramics, cutlery, engineering goods, and pharmaceuticals, he emphasised.

Hyder was of the view that there was also a need to enhance the competitiveness of the industry through a rational tariff regime, which would promote industrialisation, and an efficient refund payment system, which would not squeeze working capital of the industry.