Stagnant exports
Now that govt has averted a balance of payments crisis , it can get down to increasing the export base
Amount to only $23.9 billion, missing target by $3.1 billion. Modest growth in tax collections continued to be a challenge. PHOTO: AFP
When the Pakistan Bureau of Statistics announced that the country’s exports had touched a four-year low, amounting to $23.9 billion during the recently-concluded fiscal year, not a lot of eyebrows were raised. Like most of its targets — some more ambitious than the others — the government missed this one too, by a margin of $3.1 billion. While regional peers increase their share in global trade, Pakistan’s exports have remained stagnant, a fact that was admitted by the country’s latest economic survey. While the GSP Plus status — that granted Pakistan duty-free access to the European Union (EU) — should have helped the country increase its overall exports, the economic survey admitted that it came “at the cost of other markets”. Pakistan’s share in global trade remained at 0.15 per cent, even though its exports to the EU increased by 21 per cent. One wonders why there is a tendency to boast about the country’s GSP Plus status in official circles if it has only meant that exports to other markets have been marginalised. It is clear that Pakistan does not have the potential to increase its exports to the EU without exporting less to other countries.
Here is where the annoyingly cliched reasons for the low exports come into play. As the rest of the world witnesses a decrease in prices of commodities, Pakistan’s exports of these have witnessed a plunge in value. But the economic survey continues to criticise the country’s export trend by saying that a narrow base, unexplored markets and focus on the EU, the US and the UK — where a slowdown in economic activity has occurred — have led to stagnant growth. The country’s inability to produce value-added goods, the increase in the cost of doing business, the energy crisis and a lack of research and development are core reasons for the stagnant level of exports. Exporters have also been unable to create brands out of their products. Maybe now that the government has averted a balance of payments crisis — with the help of donors and lenders — it can get down to increasing the export base. It needs to focus its attention on exporters and institute measures that incentivises them to invest in brand development, research and explore markets other than the traditional ones. The world is a big place.
Published in The Express Tribune, July 21st, 2015.
Here is where the annoyingly cliched reasons for the low exports come into play. As the rest of the world witnesses a decrease in prices of commodities, Pakistan’s exports of these have witnessed a plunge in value. But the economic survey continues to criticise the country’s export trend by saying that a narrow base, unexplored markets and focus on the EU, the US and the UK — where a slowdown in economic activity has occurred — have led to stagnant growth. The country’s inability to produce value-added goods, the increase in the cost of doing business, the energy crisis and a lack of research and development are core reasons for the stagnant level of exports. Exporters have also been unable to create brands out of their products. Maybe now that the government has averted a balance of payments crisis — with the help of donors and lenders — it can get down to increasing the export base. It needs to focus its attention on exporters and institute measures that incentivises them to invest in brand development, research and explore markets other than the traditional ones. The world is a big place.
Published in The Express Tribune, July 21st, 2015.