There is a consensus of opinion among experts that the key to uplifting Pakistan’s economy from its present morass is to expand our industrial and agricultural productivity and boost exports. We must remember that exports are a function of a country’s productive capacity. Unfortunately, over the years we have failed to strengthen the economy’s ability to expand its productive capacity with the result that we have little to offer to the world.

A prerequisite to export expansion lies in the socio-institutional reallocation of resources from non-productive to productive sectors of the economy. Further, export promotion calls for perspective planning and developing a holistic economic framework. It is also important to develop and implement effective long-term solutions to the country’s macroeconomic woes. Above all, we need to devise a carefully crafted export diversification strategy. Such a strategy should be developed by taking on board all key stakeholders, including the industry leaders.

Textile is our prime export mover but simultaneously we should turn our focus to the IT sector that holds immense growth potential. The IT and IT-related services exports have witnessed phenomenal growth over the last few years, rising from around $800 million in FY-2013 to more than $2.6 billion in FY-2022. This 225% jump is not equaled by any other sector in Pakistan. It is estimated that at this rate, IT exports could reach $8.5 billion within the next five years. But this will require a suitable package of incentives from the government, including skill development programmes and establishment of a network of call centres, software houses, startups and IT consultancy businesses with government support. Pakistan’s nascent mobile manufacturing is another industry that has immense export potential. The need is to remove all restrictions on importing raw materials from abroad which will go a long way to promote the growth of phone exports.

According to media reports, the Pakistan Business Council recently presented to the commerce ministry a five-year exports charter and import substitution plan. The Council has also prepared an impressive list of possible initiatives and interventions that could help breathe a new life into the export sector. The PBC has underlined the need for a five-year national charter and strong linkages between export and industrial policies. Other suggestions include pursuit of an active trade diplomacy, fixing competitive energy rates and maintaining a stable exchange. It also made very sensible recommendations regarding import substitution, including removing duties on industrial inputs, encouraging greenfield investments, incentivising investments in plant and industry, etc.

The crux of the matter is that successive governments in Pakistan have miserably failed to strengthen the export sector the way it should have been. The result is that the country has no proper export policy and plan. The concerned government departments have never done their homework or any systematic survey of international markets to identify export destinations, keeping in view our natural comparative production advantages.

One tested and tried way of boosting exports is to encourage development of small and medium industries. But this labour-intensive sector, which employs millions of people in the country, faces problems accessing credit and procuring raw materials at affordable rates. This gap should be filled without further loss of time.

Export promotion is a long-term process that involves extensive research of markets, planning, mobilising available resources, revamping industry accordingly and also ensuring effective diplomatic outreach. In the present day world no country can survive and thrive without sustained and well-crafted economic diplomacy. But Pakistan sadly lacks in this behalf.

If Pakistan wants to boost its foreign exchange reserves, it must formulate a comprehensive plan of action to strengthen its export sector. If exports rise, Pakistan can earn foreign exchange and address current account deficits and other related crises, without wasting taxpayers’ money on subsidies. To this end, steps should be taken to bring down energy costs and control currency fluctuations that render local industry uncompetitive in the international market.

While formulating a comprehensive export promotion plan we can learn from the example of countries like Vietnam and Bangladesh which have offered lucrative incentives to foreign investors and industries like cheap labour and low energy costs. These two countries have done wonders in a few years by attracting foreign investment in tax-free export processing zones. In Pakistan we have been talking of establishing such zones for years but have done little to give them practical shape. It is not yet too late to make amends by fast-tracking all such plans. Agriculture exports is another area which has suffered gross neglect in the past. Needless to say, rising exports will not only boost our foreign exchange reserves but also create new job opportunities for the bulging population of youth in the country.