The government is determined to improve exports in a bid to contain the current account deficit as well as place the country on a path of sustainable growth.
To gain an insight into how the government aims to meet this goal, The Express Tribune reached out to Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood.
“The country initially aimed to export $38 billion worth of goods and services in the ongoing fiscal year but now we have stretched the target to $40 billion,” Dawood said in an exclusive interview to The Express Tribune.
He said that out of the original target of $38 billion, the government planned to fetch $30 billion through foreign shipment of goods while the remaining $7-8 billion was supposed to be received through services exports.
Recently, Prime Minister Imran Khan visited Tajikistan to explore new markets for exporters of Pakistan, however, Dawood was of the view that new avenues were not a problem for Pakistan.
According to him, businessmen need to focus on increasing the installed production capacity to cater to the needs of new markets and enhance exports.
Earlier, the government sent a delegation of businessmen to Africa, which is a massive market of 1 billion people and a few months ago, Prime Minister Imran Khan travelled to Uzbekistan to explore fresh export avenues in Central Asia, which is a $90 billion segment, the adviser said.
“Pakistan has approached the International Monetary Fund (IMF) 23 times and the only permanent way to stop returning to the global lender is exports,” remarked Dawood.
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Citing that Pakistan’s population stood at a substantial 210 million, he said that exports would not only fetch foreign exchange but would also generate employment opportunities and aid in import substitution, which was another target of the government.
According to the adviser, the government is responsible for setting direction for the business community but lamented that no other leadership worked for exports while holding power at the centre.
Elaborating on government’s facilitation, he said that shipments of salt from Pakistan to overseas markets currently stood at $10 million and they were expected to hit $200 million in a few years due to the supportive steps taken by the leadership.
Mobile phone is another classic example of government’s facilitation as locally produced mobile phones have surpassed imports while exports of cellular phones have also started. He hoped that foreign shipments of mobile phones would increase over the next few years.
“Now, we are aiming to enter the global value chain by diversifying export products in terms of sectors, spectrum and geography,” said Dawood.
He pointed out that traditional export sectors of Pakistan included textile and apparel, leather, surgical instruments, sports goods, carpets, rice and cutlery. However, he stated, the government was paying attention to a number of new sectors including engineering goods, pharmaceuticals, marble and minerals, processed foods and beverages, footwear, gems and jewellery, chemicals, meat and poultry, food and vegetables.
In addition, the adviser underlined that special importance was being accorded to exports of services in IT, transport, logistics and tourism segments.
“The global engineering sector is worth around $9 trillion and the value of chemical market is $1 trillion,” he revealed. “We want to conquer these two areas at the global level along with uplifting IT exports, which is another huge market.”
Dawood disclosed that to encourage businessmen to set up manufacturing units in the engineering sector, the government had offered 5% tax rebate compared to 2% on textile.
He was of the view that the country needed to pay attention to small and medium enterprises (SMEs) along with large corporations to increase the export capacity.
“Large companies are free to get loans from banks while financial institutions are reluctant to offer funds to small and medium-sized businesses,” he lamented.
Published in The Express Tribune, September 24th, 2021.
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