The coronavirus pandemic devastated the world economy, which is in the throes of a serious crisis. Different countries are formulating new strategies to revive their economies through enhanced exports. The world trade outlook is murky.
Against this background, it is welcome news that Pakistan exports have begun to curl upwards. After hitting historic lows in the April-June quarter, Pakistan exports have perked up in July. According to figures released by the State Bank of Pakistan, Pakistan managed to post 5.8 per cent growth in exports in July on a year-on-year basis after recording an annual drop of 54pc in April as the lockdown disrupted all business operations
As per the available figures, the downward swing started in March 2020, when exports fell by 8pc. After a steep fall in April, exports fared relatively better by shrinking only 33.4pc in May. June witnessed a drop of 6pc after which exports showed a positive trend.
The government has been very active during the period and helped manufacturers by lowering taxes and levies. The exporters’ community has thanked the government for its relentless support while government spokesmen have acknowledged the hard work of progressive entrepreneurs, techies and fruit and vegetable traders, who did not let the health scare numb their competitive spirit and in the end they succeeded in beating all odds in the worst phase for trade and business.
Abdul Razak Dawood, adviser to the prime minister on commerce, is naturally jubilant, since his strategy on incentivising exports through subsidies and concessions for the economic turnaround yielded fruitful results. He has expressed confidence in the future of exports, assuming the gradual return to normalcy around the globe. He has also promised to lift a ban on the export of personal protection equipment (PPE) to expand Pakistan’s footprint in the special market.
In a media talk recently, he said that since the medical community feared a disaster in Pakistan in March, the government had to ban the export of PPE, compromising the full utilisation of the installed production capacity of the items in the country. However, the government later made an exception for cotton facemasks and activated commercial attachés to coordinate our exporters with overseas clients.
Without doubt, the lingering price hike in essential food items and power supply disruptions are two most crucial issues that need urgent government attention. The authorities concerned in Islamabad have been approached to take up the issue of frequent power supply disruptions to industries in Karachi with K-Electric. The matter has now been taken up at the highest level which raises the hope that a solution to the problem will be found very soon.
In his various statements, the adviser on commerce has repeatedly underlined his commitment to free trade. To this end, his ministry has launched a number of new initiatives towards geographical and product diversification, duty-free import of raw materials and tariff rationalisation.
As suggested time and again by various chambers of commerce and industry in the country, the relevant official bodies need to engage more with sectoral trade leaders and chambers to remove hurdles to exports. Mentionable in this context is the commerce ministry’s role in facilitating e-commerce, which was translated into better export performance by techies. According to media reports, the ministry is now in the process of getting input from chambers of commerce and trade bodies to develop strategies to ensure better export performance by tech companies. The strategy will focus on subsidised power rates, cheap credit and release of withheld duty drawback claims as well as guidelines for old players and new entrants into the export business.
Some circles have expressed doubt whether the July export data can sustain in the coming months. According to them, the country needs a wider range of value-added products to sustain and gain export markets. Besides, in the absence of better compliance with international standards and a credible certification infrastructure to check the health and sanitary status of each consignment in a world in the grip of a pandemic, one mishap related to a contaminated container sourced from Pakistan anywhere can damage the entire export sector.
In the long run, the government can succeed in its export development drive only by widening the base of the economy through fast-paced industrialisation, strong marketing and geographical and product diversification. Also, we will need to make greater and more varied use of digital platforms and change production lines as per the demand of the world market.