Export target
Indications are that Pakistan would miss its over-ambitious export target of $35 billion by June 2018, which the federal government set in the three-year Strategic Trade Policy Framework 2016-18. As per knowledgeable sources, after failing to meet the goal in three years, the government will now try to achieve the target in the new trade policy but this time the timeframe will be for five years from 2019 to 2023. The latest official claim is that Pakistan can push exports above $36 billion in the next five years. In proof the government cites the figure that fter a drop in exports over the past three years, the shipments have recovered at an average pace of 10-11% per month since the beginning of the current fiscal year in July 2017. If the pace of growth is maintained in remaining months of the year, then Pakistan's exports will reach $23 billion by the end of current fiscal year.
Recently, a consultative session on the Strategic Trade Policy Framework (2019-23) was jointly organised by the Ministry of Commerce and US Agency for International Development (USAID) at which various export options were discussed. On that basis, exports of $36 billion would be achieved if the current average growth of 10-11% was maintained in all months throughout the next five years. Some experts say that this an overly optimistic target, but others are of the view that the 10-11% growth rate is a very moderate approach. Pakistan has a lot of potential and can achieve a higher growth of 1520% per year.
Government sources acknowledge that Pakistan would miss the $35-billion export target this year mainly due to delay in implementation of most of the policy initiatives and partly due to nine-month delay in announcement of the policy. Major causes of the policy failure are lack of diversification of exports, little innovation and value addition in export goods, insignificant research to know latest consumer needs and failure to find new markets. Seventy per cent of exports comprise three traditional products including textile. Secondly, the country mostly exports commodities in bulk instead of shipping them in packages. Around 74% of food items and 40% of textile goods are exported in the form of commodity. But higher value addition may attract higher export values.
In the days ahead a number of initiatives are under way, including a review of free trade agreements (FTAs) with two countries and signing of FTAs with more countries with the objective of reviving exports under the new trade policy. FTAs with China and Indonesia are being reviewed these days whereas talks have been going on with Turkey and Thailand for free trade deals which are believed to give a boost to trade with them. Besides, Pakistan is searching for new markets in countries and regions like Australia, China and Africa. "Look Africa Plan" and Emerging Pakistan" are some of the initiatives of the Ministry of Commerce.
Further, the new trade policy would promote meat exports and in that regard the government would soon announce a package for the poultry industry. The policy will also promote those sectors that have been under pressure due to liberal imports like that of steel. In the meanwhile, the government has addressed exporters' concerns through rupee depreciation against the dollar in December 2017 when the State Bank of Pakistan let the rupee weaken 4.8% to Rs110.64. The depreciation, along with the Rs180-billion PM export package, has started reviving exports and the trend may continue in coming months. Encouragingly, iniial reports suggest the growth in exports (in December 2017) was much better (than the 10-11% average so far this year. For the first time in history, Pakistan is organising a buyers' conference in Islamabad to know about their demands and expectations.