Trade pol­icy

The Pak Banker - - FRONT PAGE -

As is com­mon knowl­edge, the Strate­gic Trade Pol­icy Frame­work (STPF) 2015-2018 has failed to achieve the $35 bil­lion ex­port tar­get by 2018. Now an­other trade pol­icy frame­work cov­er­ing the pe­riod 2018-2023 has been for­mu­lated with the tar­get of $61 bil­lion ex­ports by 2023. The new pol­icy is said to re­volve around eight key fac­tors: "in­sti­tu­tional strength­en­ing, trade pro­mo­tion and brand­ing, trade fa­cil­i­ta­tion, mar­ket­ing ac­cess and re­gional connectivity, ser­vices strat­egy, prod­uct de­vel­op­ment, com­pli­ance and gen­der main­stream­ing." That is what the last STPF fo­cused on as well. But noth­ing con­crete was achieved.

The last doc­u­ment had said: "STPF 2015-18 has iden­ti­fied four main pil­lars on the ba­sis of (i) key en­ablers, (ii) eval­u­a­tion of STPF 2012-15, (iii) emerg­ing global trade sce­nario and (iv) ex­ten­sive con­sul­ta­tion with the pri­vate sec­tor and other stake­hold­ers. These pil­lars are as fol­lows: (a) Prod­uct so­phis­ti­ca­tion and di­ver­si­fi­ca­tion (re­search and de­vel­op­ment, value ad­di­tion, and brand­ing); (b) mar­ket ac­cess (en­hanc­ing share in ex­ist­ing mar­kets, ex­plor­ing new mar­kets, trade diplo­macy and re­gion­al­ism); (c) in­sti­tu­tional de­vel­op­ment and strength­en­ing (re­struc­tur­ing, ca­pac­ity build­ing, and new in­sti­tu­tions); and (d) trade fa­cil­i­ta­tion (re­duc­ing cost of do­ing busi­ness, stan­dard­iza­tion, and reg­u­la­tory mea­sures)." The last STPF had clearly spelled out that im­prov­ing ex­port com­pet­i­tive­ness is one of its tar­gets, whereas im­prov­ing com­pet­i­tive­ness was also one of its key en­ablers across var­i­ous fac­tors, in­clud­ing qual­ity in­fra­struc­ture, labour pro­duc­tiv­ity, ac­cess to util­i­ties, and level of tech­no­log­i­cal de­vel­op­ment. But few of these ob­jec­tives were achieved.

Need­less to say, the new pol­icy must be based on the lessons learned from the fail­ure of the last one. One of the key fail­ures pre­vi­ously was lack of in­ter-min­is­te­rial and in­ter-gov­ern­men­tal work­ing re­la­tion­ship vi­tal to achieve tar­gets of such tall or­der. In this con­nec­tion it is im­por­tant to men­tion here that sev­eral tax re­form com­mis­sions have ad­vised the gov­ern­ment to form work­ing groups be­tween the Min­istry of Com­merce (MoC) and FBR; MoC and Min­istry of Fi­nance; MoC and SMEDA; MoC and SBP and the MoC and provin­cial gov­ern­ments. These work­ing groups, ac­cord­ing to their re­spec­tive do­mains, were ad­vised to look at a broad range of af­fairs, in­clud­ing tar­iff ra­tio­nal­i­sa­tion, in­for­mal trade, re­lease of re­funds and ex­port de­vel­op­ment funds, ca­pac­ity build­ing for SME ex­porters, bank lend­ing and get­ting the prov­inces to im­ple­ment the con­ven­tions un­der GSP+ con­di­tion­al­ity.

It is ad­vis­able that the new STPF is pre­pared and im­ple­mented in li­ai­son with provin­cial de­part­ments be­cause fol­low­ing the de­vo­lu­tion a host of eco­nomic func­tions - such as labour - and sec­tors now lie with the prov­inces. The STPF should also set up spe­cific de­liv­ery units for each of the spot­light sec­tors con­sid­er­ing Pak­istan's con­sis­tent fail­ures in pub­lic ser­vice de­liv­ery which is no doubt a com­plex process re­quir­ing co­or­di­na­tion of mul­ti­ple stake­hold­ers. As ex­perts have re­peat­edly pointed out, it is also time to re­think the man­date of the Min­istry of Com­merce. As it is, among other things, the MoC man­ages the ad­min­is­tra­tion of state owned in­surance com­pa­nies. Be­sides, the MoC al­ready has a man­date to "as­sess and pro­vide ac­tion­able in­tel­li­gence to gov­ern­ment en­ti­ties on both for­eign trade and do­mes­tic com­merce" in ad­di­tion to MoC's task to look into "how to in­crease the pro­duc­tiv­ity" in the real sec­tors.

All said, be­fore re­leas­ing the de­tails of the lat­est STPF, the gov­ern­ment should first clearly state what it did or did not achieve from the last pol­icy, to­gether with the rea­sons. Also, af­ter the com­ple­tion of the on­go­ing stake­holder con­sul­ta­tions, the gov­ern­ment should share the draft with the wider pub­lic with a view to cor­rect­ing any short­com­ings in the light of gen­eral feed­back. It is no use set­ting lofty tar­gets without cre­at­ing an en­abling en­vi­ron­ment for the same.

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