The foreign exchange reserves with the State Bank of Pakistan (SBP) have tumbled below $10 billion, which are not enough to pay for even two months of imports and the best way to improve the reserves is to promote foreign direct investment (FDI) and boost exports, say businessmen.
They asked the government to offer special incentives in the upcoming budget to the exporters and foreign investors to boost exports and attract maximum FDI.
Acting Islamabad Chamber of Commerce and Industry (ICCI) President Jamshaid Akhtar Sheikh, while meeting a delegation of businessmen, pointed out that Bangladesh’s exports had crossed $43 billion during July-April 2021-22, showing an increase of over 35% year-on-year.
Read FDI inflows stand at $170.6 million in April
However, Pakistan’s overall exports during July-March 2021-22 stood at just over $28 billion, while its total imports shot up to over $62 billion.
“It shows that imports are $34 billion more than exports and this huge gap is the main cause of dwindling foreign currency reserves.”
The acting ICCI chief said that Pakistan’s overall exports as a percentage of gross domestic product (GDP) had also been on the wane for the past many years.
The ratio came down from over 13% in 2013 to around 10% in 2020, while the global average was over 30% in 2013 and over 26% in 2020.
“No serious efforts have been made to boost Pakistan’s exports for the last many years due to which our economy is now facing multiple challenges,” remarked Sheikh.
Quoting Finance Minister Miftah Ismail, the ICCI high-up said that the minister himself had stated that the country’s 80% of manufacturing was meant for domestic consumption and only 20% was for exports, which indicated that Pakistan’s export volume was very low compared to other countries.
Published in The Express Tribune, June 9th, 2022.
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