Businessmen call for raising exports, remittances

Keeping in view a 14.7% rise in Pakistan’s trade deficit in November 2020, businessmen have urged the government to focus on accelerating exports and further increasing remittances.

Officials of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said imports, which were previously on the decline, had now started picking up, indicating revival of economic activities but at the same time it would also widen the trade deficit, which was not good for Pakistan’s economy.

Talking to a trade delegation on Saturday, FPCCI President Mian Anjum Nisar pointed out that economic managers had boasted about their performance in relation to the current account balance, which remained in surplus for the fourth consecutive month in October 2020, at $382 million.

“It is noteworthy that in September 2020, the current account had been in surplus for the third month in a row at $73 million,” he said. “However, it should be kept in mind that the surplus has emerged on the back of a sustained increase in remittances and a smaller trade deficit.”

He lauded that since the start of current fiscal year in July 2020, the cumulative current account surplus had reached $1.2 billion, reversing a deficit of $1.4 billion recorded in the same period of previous year.

To have consistency in the current account surplus for a longer period without compromising on industrial growth, the government should focus on enhancing exports and give priority to the resolution of business and trade issues, otherwise, economic problems and the balance of payments could worsen with a growing trade deficit.

Nisar said the low export volume and rising trade deficit were chronic issues which should be resolved immediately. “Exportable items should be produced in accordance with the international demand to fully exploit the GSP Plus status.”

He lamented that several industries and sectors were neglected in the past, adding that a holistic approach should be adopted to boost economic growth as Covid-19 had adversely impacted world’s economy as well as Pakistan’s trade and industrial sectors.

The government has already missed its annual export target in the first two years of its rule. For the current fiscal year, the export target is $27.7 billion, which requires about 6% growth.

He asked the government to formulate long-term and consistent policies for the revival of industry and a considerable improvement in exports, which had remained stagnant over the years.

“Unless attention is paid to all factors which hamper industrial and export growth, the country may not be able to achieve desired results.”

Some of the impediments to industrial growth are high cost of production, poor governance, obsolete technology, lower productivity, lack of competitiveness, supply constraints and energy issues.

He highlighted that the current export portfolio was marred by a lack of diversification because only a few products were being exported to limited markets. “A major enhancement in exports requires widespread structural reforms,” he stressed.

Published in The Express Tribune, December 6^th, 2020.

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