Bold ambitions

Prime Minister Shahbaz Sharif's directive to his economic team to double Pakistan's exports to $60 billion over the next five years is nothing short of a herculean task. With last year's exports standing at around $30 billion, achieving this target will require more than just policy tweaks. The challenge is further compounded by the fact that Pakistan's trade balance is being artificially managed through import restrictions, which have stabilised foreign reserves but stagnated growth in the process.

For any export-driven strategy to succeed, the first and most immediate step must be reducing energy prices. Pakistan's exporters, particularly in the textile sector, struggle to compete internationally due to exorbitant utility costs. A competitive export industry cannot thrive when power tariffs are among the highest in the region. Secondly, transport infrastructure is in dire need of attention. Karachi's industrial zones, particularly Korangi and SITE, are plagued with dilapidated roads, including an outdated port system at KPT. Exporters lose valuable time and money navigating this broken infrastructure, making goods less competitive in global markets. Beyond physical logistics, the country's communication infrastructure also requires urgent upgrades. Reliable internet and digital connectivity are crucial for businesses to engage with international buyers, streamline supply chains and expand into e-commerce. Without digital transformation, Pakistan's exporters will continue to lag behind regional competitors such as Bangladesh and Vietnam, both of which have made significant strides in this area. However, all these measures require capital - something the government sorely lacks. With the fiscal deficit widening and external debt obligations mounting, where will the funds come from? The IMF's stringent conditions leave little room and domestic revenue generation remains weak.

Unless the government undertakes serious economic restructuring and fosters a more investment-friendly environment, the goal of $60 billion in exports will remain an illusion. Without addressing the long-standing issues, Pakistan's export growth strategy will be akin to pulling a rabbit out of a hat - an act of magic that, in the real world, is bound to fail.