Reforms needed to ensure sustainable growth

Federation of Pakistan Chambers of Commerce and Industry President Mian Anjum Nisar has stressed the need for serious structural reforms, with a keen focus on value-addition for a sustainable economic growth.

He recommended the government to raise exports to double digit of the GDP till end of its term, as Pakistan's exports have bounced back after witnessing decline in the last four months. The country's exports have fetched $1.99b in July 2020, witnessing 5.8% growth in dollar terms. Nisar said that consistent borrowing by developing economies to shore up its reserves in desperate times is only leading towards a debt trap. He said that borrowing from friendly countries should only be seen as a short-term solution to prevent reserves' depletion and consequent further depreciation of the currency.

He also stressed that focus should be on promoting exports and restricting imports alongside making domestic industry more competitive and subsequently expanding its export market. "Exports of goods and services are an injection into the circular flow of income, which lead to a rise in aggregate demand and an expansion of output, helping raise per capita incomes and reduce extreme poverty especially in developing economies like Pakistan."

He said that world trade has still not come out of the dip in the wake of the coronavirus pandemic, as exports of regional countries including India and Bangladesh registered a decline but Pakistan's exports bounced back, reporting around 5% growth in July 2020 compared with regional players.

Regarding market diversification, the FPCCI president pointed out that not much progress has been shown in this regard, as exports still seem to be heavily dependent on traditional export markets. He underlined the need for evaluating geographical diversification in order to re-align the focus towards new opportunities. The government agencies will have to extend all kind of necessary support to the exporters in order to achieve the targets, not only in terms of numbers but also with regards to intended policy outcomes.