Finance minister launches EXIM to boost global trade

Aims to foster export growth, economic development

ISLAMABAD:

Caretaker Minister for Finance, Revenue, and Economic Affairs, Dr Shamshad Akhtar, formally launched Pakistan’s Export-Import Bank (EXIM) on Thursday, marking a significant stride towards fortifying external trade, attracting investments and propelling broader economic growth in the country.

“EXIM’s operationalisation is a proud moment and a major milestone for us today. It will augment the banking and trade finance landscape as we know,” the finance minister remarked while speaking at the inaugural ceremony of the bank.

She highlighted the global impact of EXIMs, citing that these institutions disbursed a staggering $2.5 trillion in trade finance last year, substantially fostering exports across over 60 countries and boosting export investments.

Detailing the diverse portfolio of products offered by EXIMs, Akhtar emphasised the significance of export credit loans, providing competitive-rate financing to exporters.

As the EXIM of Pakistan grows and matures, the minister anticipates that it would shape Pakistan’s trade finance, promoting it principally through a proper institutional framework backed by effective policies and regulatory framework. However, she noted that it would need to be accompanied by streamlining export policy frameworks as together both would be able to contribute to balance of payment sustainability that in the past had been hurting low levels of export earnings.

Akhtar highlighted EXIM’s potential to enhance Pakistani exporters’ competitiveness globally through provisions like lending, credit insurance, and guarantee services. These services aim to level the playing field against competitors reliant on their national Export Credit Agencies and EXiMS, facilitating access to broader global markets.

Notably, EXIM would introduce export insurance products in Pakistan to safeguard exporters against credit default risks, empowering them to explore international infrastructure projects. She underscored the necessity for EXIM to navigate its operations effectively, ensuring a delicate balance between export growth, risk diversification, and industry sustainability. Additionally, Akhtar emphasised EXIM’s role in reinforcing its core functions of insurance while gradually managing export finance schemes in compliance with legal constraints. Acknowledging the collaborative effort between EXIM and the State Bank of Pakistan, Akhtar emphasised the imperative for their partnership until the SBP could phase out of export finance operations smoothly, reinforcing EXIM’s capacity-building initiatives.

She also highlighted the importance for EXIM Pakistan to adhere to international practices while showcasing its instrumental role in disbursing trade finance globally.

Published in The Express Tribune, December 22^nd, 2023.

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