What is Pak­istan Im­port­ing?

There is no bal­ance in the items that the coun­try im­ports.

Enterprise - - Contents - By Dr Pervez Tahir

In the first 11 months of 2017-18, im­ports stood at $55.23 bil­lion, an in­crease of 14.12 per cent. Ex­ports in­creased by slightly more at 15.28, per cent. How­ever, the ab­so­lute level of ex­ports is just $21.35 bil­lion, pay­ing for only 38.7 per cent of im­ports. In the­ory ex­ports do not have to be equal to im­ports, there be­ing other means of pay­ing for im­ports. But the gap in our case is hu­mon­gous. What ex­actly are we im­port­ing? Are some of these dis­pens­able at a time of for­eign ex­change cri­sis, with its grav­ity in­creas­ing by the day?

Im­ports are di­vided into nine groups. As one would ex­pect, the largest is the Petroleum Group val­ued at $12.93 bil­lion or 23 per cent of the to­tal. This is un­der­stand­able as Pak­istan is de­pen­dent on the world for its re­quire­ments of petroleum prod­ucts and crude oil. Sav­ings are still pos­si­ble by low­er­ing en­ergy in­ten­sity, a mea­sure of the amount of en­ergy used to pro­duce a unit GDP. It has been con­sis­tently fall­ing glob­ally and in all ma­jor economies. Pak­istan falls way be­hind its peers. A big time new en­trant is the im­port of gas that con­trib­utes 18.4 per cent of the Petroleum Group im­ports. Next in im­por­tance is the Ma­chin­ery Group with a share of 19.3 per cent in the to­tal im­ports. Again, Pak­istan is de­pen­dent on the im­port of cap­i­tal goods to raise the in­vest­ment-to-GDP ra­tio nec­es­sary for a re­spectable rate of growth of GDP. Power-gen­er­at­ing ma­chin­ery, elec­tri­cal ma­chin­ery and ap­pa­ra­tus, tele­com and tex­tile ma­chin­ery are, in that or­der, the ma­jor items in the group. The third largest group is the Agri­cul­tural

and Other Chem­i­cals Group, with a share of 14.7 per cent. These are es­sen­tial in­puts for agri­cul­tural and in­dus­trial pro­duc­tion such as fer­tilis­ers, in­sec­ti­cides, plas­tic ma­te­ri­als, medic­i­nal prod­ucts, etc.

In a coun­try still claim­ing to be agri­cul­tural, $915 mil­lion were spent on im­port­ing raw cot­ton. There is not much pub­lic aware­ness of the fact that the fourth-largest group of im­ports is the Food Group. In the pe­riod cov­ered here, Pak­istan in­curred a huge ex­pen­di­ture of $5.72 bil­lion to im­port food items. The share in to­tal im­ports was 10.3 per cent. Around half of the amount went to the im­port of ed­i­ble oils and tea due to in­signif­i­cant lo­cal pro­duc­tion. The in­dige­nous oilseed crops such as sunflower, canola, rape­seed/mus­tard and cot­ton­seeds cater for only 12 per cent of the de­mand. Not much im­port sub­sti­tu­tion is in ev­i­dence. Rape­seed/mus­tard showed a neg­li­gi­ble growth of 0.1 per cent in 2017-18. The other half of food im­port bill was on milk & its prod­ucts, dry fruits & nuts, spices and pulses. De­spite claims that Pak­istan is among the top milk pro­duc­ers of the world, the coun­try im­ported $252 mil­lion worth of milk and re­lated prod­ucts in 201718, an in­crease of 8 per cent over the pre­vi­ous year. Pulses im­port cost the coun­try $483 mil­lion. Do­mes­tic pro­duc­tion of ma­soor has re­mained un­changed and that of moong has de­clined by 8.7 per cent. What is achiev­able is demon­strated by the fact that the im­port bill in the pre­vi­ous year was $903 mil­lion. The re­duc­tion was caused by the in­crease of maash pro­duc­tion by 4.3 per cent. The usual sus­pects, cars and mo­tor­cy­cles, cost $1.3 bil­lion, while buses and trucks cost $581. “All other items” claim a hefty $4.6 bil­lion.

Ru­pee de­pre­ci­a­tion and reg­u­la­tory im­port du­ties will re­duce im­ports, but the de­sired im­pact re­quires re­in­force­ment by ap­pro­pri­ate non­tar­iff bar­ri­ers against dis­pens­able im­ports and in­cen­tives for do­mes­tic pro­duc­tion, es­pe­cially in the Food Group.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.