Govt of­fers in­cen­tives to spur dwin­dling ex­ports

Pakistan Observer - - ECONOMY WATCH -

KARACHI—The per­sis­tently low per­for­mance of the for­eign trade sec­tor, es­pe­cially ex­ports, have forced the govern­ment to of­fer a wide range of in­cen­tives to boost it. The new steps will be ef­fec­tive from July 1the start up date for the Na­tional Bud­get for FY-2017. What out­come of the new tax con­ces­sions and in­cen­tives is ex­pected? Finance Miniser Ishaq Dar said: “The con­ces­sions and in­cen­tives aim at achiev­ing the ob­jec­tive of a 25 per cent in­crease in ex­ports in FY-17.” He said: “We want to in­crease ex­ports to $35 bil­lion to re­duce coun­try’s de­pen­dence on for­eign loans.”

Ex­plain­ing the pos­si­bil­ity of achiev­ing this tar­get of $35 bil­lion, Dar said: “The ex­porters, in­clud­ing the tex­tile sec­tor, which is Pak­istan’s big­gest ex­porter, promised to us ‘if th­ese con­ces­sions and in­cen­tives are given to us, we will give you 25 per cent in­crease in ex­ports.’” But that will be quite a high tar­get to achieve. Be­cause the ground re­al­ity is that Pak­istan’s ex­ports which were just $20.5 bil­lion in 10 months, July-April of FY-13, sadly de­clined to $18.2 bil­lion in the like pe­riod of FY-16. Go­ing by th­ese facts, achiev­ing a $35 bil­lion ex­port tar­get in FY-17 will be quite a task.

Im­ports were $33 bil­lion in July-April FY13 com­pared to $32.7 bil­lion in the like pe­riod of FY-16. Sav­ings in the im­port bill of oil were nearly 40 per cent. Th­ese sav­ings were di­verted to larger im­ports of ma­chin­ery and in­dus­trial raw ma­te­ri­als. The im­port of ma­chin­ery in the last three years has in­creased by a cu­mu­la­tive 40 per cent - which is an in­di­ca­tion of growing in­ter­est of for­eign and do­mes­tic in­vestors in Pak­istan. The govern­ment re­alises the fact that Pak­istan’s ex­port po­ten­tial has not been fully achieved due to “de­pressed in­ter­na­tional com­mod­ity prices and a con­tin­u­ing slow­down in ma­jor ex­port mar­ket.”—Agen­cies

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