Ex­port Strat­egy of Pak­istan

*Yawar Ab­bas

The Diplomatic Insight - - Editor’s Desk -

The global fi­nan­cial cri­sis in 2008 re­sulted in re­tard­ing the growth of eco­nomics all over the world. The growth of South Asia was also af­fected and there was a de­crease in growth rate from about 8.5% to 5.5%. Eliena Car­dosa, Chief Econ­o­mist on South Asia at the World Bank, how­ever, hopes that the growth of South Asia would in­crease to about 7% in 2011, due to the po­ten­tial of the re­gion. Econ­o­mists unan­i­mously agree that the global fi­nan­cial cri­sis did not deal a big blow to Pak­istan's econ­omy. The global crunch did not di­rectly af­fect Pak­istan in a se­vere man­ner be­cause the coun­try was not toomuch in­te­grated in the global econ­omy. How­ever, the global melt down did have ad­verse ef­fects on Pak­istan in­di­rectly, be­cause Pak­istan's econ­omy is not im­mune from ex­ter­nal shocks. The global cri­sis, al­though in­di­rectly af­fected Pak­istan, re­duced its growth rate, from 7-8% an­nu­ally in 2006-07 to 1-2% in 2008-09. Fortunately, Pak­istan bounced back from the ad­verse ef­fects of global fi­nan­cial cri­sis. The ex­port-sec­tor, which ex­pe­ri­enced a slow-down, due to de­crease in de­mand in for­eign mar­kets for Pak­istan's goods, is on the path of re­cov­ery. In the last fis­cal year, the ex­ports of Pak­istan touched an all time high of $22 bil­lion. The enor­mous growth in ex­ports can be at­trib­uted to the new trade pol­icy adopted by Pak­istan. This might not be the sole rea­son for growth in ex­ports, but it is a ma­jor one. The other rea­son for ex­port growth is the­world-wide in­crease in tex­tiles prices. This de­vel­op­ment is ad­van­ta­geous to Pak­istan be­cause its tex­tile sec­tor con­trib­utes about 54% to the to­tal ex­ports. Nev­er­the­less, the ex­port strat­egy of Pak­istan is the main ve­hi­cle for growth of Pak­istan's ex­ports. The Min­is­ter for Com­merce, Makhdoom Amin Fa­heem an­nounced the ex­port strat­egy in his trade pol­icy speech in 2009. He in­au­gu­rated the “Strate­gic Trade Pol­icy Frame­work” (STPF). Ac­cord­ing to the STPF, Pak­istan's ex­port strat­egy was to be based on a num­ber of pil­lars. The most im­por­tant one was 'di­ver­si­fi­ca­tion of ex­port mar­kets and prod­ucts'. Ex­perts be­lieve that this pil­lar is a ma­jor stim­u­lus for boost­ing ex­ports in the last fis­cal year. The Min­is­ter an­nounced that Pak­istan will look for more mar­kets world-wide, which are hith­erto un­tapped. More­over, the prod­ucts that Pak­istan will ex­port need to be di­ver­si­fied. Apart from this, Pak­istan will look for­ward for prod­uct so­phis­ti­ca­tion and com­pet­i­tive­ness by em­ploy­ing new tech­nol­ogy for its value-addition. More­over, the new ex­port strat­egy en­vis­aged in­creas­ing the level of com­pet­i­tive­ness of the lo­cal pro­duc­ers by giv­ing them fa­cil­i­ties. Th­ese in­clude re­moval of sup­ply-side con­straints. Pro­vi­sion of elec­tric­ity's con­stant sup­ply was en­sured. It was also en­vis­aged the ex­port ser­vices will be im­proved and the com­mer­cial and fis­cal poli­cies will be made ex­porter-friendly. Bring­ing in new in­vest­ment in tech­nol­ogy and ex­ploita­tion of hith­erto un­ex­plored sec­tors was also part of the ex­port strat­egy. More­over, the trans­fer of skills to labour, es­pe­cially women, was also given a pri­or­ity. It was also en­vis­aged that through in­creased en­gage­ment and ne­go­ti­a­tion with ex­ist­ing trade part­ners, Pak­istan would strive for get­ting bet­ter terms of trade and look for more pen­e­tra­tion in for­eign­mar­kets. Pak­istan's ex­port strat­egy is hence a very pro-ac­tive pol­icy and is a great stim­u­lus for boost­ing up the ex­ports of the coun­try. It has all the in­gre­di­ents of awin-win strat­egy. Ex­perts, how­ever, are of the opinion that the pol­icy is not im­ple­mented com­pletely. They be­lieve that if the pol­icy is im­ple­mented in let­ter and spirit, the ex­port sec­tor­will boost up fur­ther, given its enor­mous po­ten­tial. Traders, es­pe­cially from var­i­ous Cham­bers of Com­merce and In­dus­try, have re­cently de­manded that all the pil­lars of ex­port strat­egy be im­ple­mented by the gov­ern­ment, so that op­ti­mum re­sults are achieved. They agree that if the pol­icy is en­tirely im­ple­mented, the re­sults would be much greater. They also claim that presently the gov­ern­ment is fo­cus­ing on di­ver­si­fi­ca­tion of mar­kets and prod­ucts, but there is not much fo­cus on other el­e­ments of the ex­port strat­egy that were en­vis­aged, e.g. con­stant sup­ply of elec­tric­ity for in­dus­try. In con­clu­sion, one can say that the ex­port strat­egy that the gov­ern­ment is pe­rus­ing does not have any ma­jor de­fects. Though, far from be­ing flaw­less, it is a prac­ti­cal, work­able and a promis­ing strat­egy. Given the huge trade im­bal­ance, the gov­ern­ment needs to aug­ment the ex­port sec­tor fur­ther. The $10 bil­lion trade deficit in the last fis­cal year has to be bridged by ex­ports. There is not much need for pa­per work only. The need of the hour is im­ple­men­ta­tion of ex­port strat­egy in to­tal­ity, so that the enor­mous po­ten­tial of the ex­port sec­tor is fur­ther ex­ploited and the econ­omy of the coun­try is pro­vided sta­bil­ity by bridg­ing the gap be­tween ex­ports and im­ports. *Thewriteisas­tu­dentofPhDinIn­ter­na­tion­alRe­la­tion­sat theNa­tion­alDe­fenceUniver­sity,Is­lam­abad.Hecanbe reache­dat:mryawarab­bas@ya­hoo.com

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