Editorial

Declining exports

Exports should ideally be the area where the country makes its money. That doesn’t seem to be happening

Editorial August 14, 2015

There is a lot of scope of increasing the export base and there are untapped markets the world over, which would welcome Pakistani products. STOCK IMAGE

Pakistan’s exports continue to decline with the latest trade figures for July confirming this trend. The value of the country’s exports slipped from $1.92 billion in July 2014 to $1.59 billion in July 2015. If there were any hopes regarding the balance of trade figure providing a reprieve due to declining imports, those were dashed as well. From $3.24 billion, the figure increased to $3.37 billion in July 2015.

During the past year, exporters continued to lament the increased cost of doing business. From electricity surcharges to refunds that are stuck with the FBR, exporters — mainly from the textile sector — have shown their displeasure. The situation reached the tipping point when the All Pakistan Textile Mills Association gave a strike call before withdrawing it after the finance minister intervened. We can argue that the textile sector should be focusing on value-addition, improving quality and tapping into markets other than the European Union. However, all these measures will have little impact if the power crisis persists and the government is unable to reduce electricity tariffs and fuel prices. A strong rupee has not helped either.

It is also important to realise that exports have not declined overnight. Pakistan has long suffered from focusing mainly on the textile sector. Within the sector, there is too much focus on exporting products with little or no value-addition. The GSP Plus status may have helped, but competitors have upped their game to negate that advantage. There is a lot of scope of increasing the export base and there are untapped markets the world over, which would welcome Pakistani products. There is a need to realise the potential of the IT and sports goods sectors as well. For these, too, though the power crisis remains a thorny issue. The government is focusing on privatisation, increasing its revenue through indirect taxes and relying on loans and grants, but exports should ideally be the area where the country makes its money. That doesn’t seem to be happening.

Published in The Express Tribune, August 15^th, 2015.

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