Agricultural Export Processing Zones are proposed to be set up


July  28 - Aug 03
, 2003 




Commerce Minister Humayun Akhtar Khan recently announced the Trade Policy 2003-04 envisaging exports target at $12.1 billion and imports at $12.8 billion. During 2002-03, exports stood at $11.350 billion and imports at $12.2 billion. Trade deficit of $700 million is expected in the current financial year against $1.6 billion of last fiscal year.

The minister unfolded salient features of the policy in his nationwide speech on TV and Radio. Earlier the federal cabinet approved the Trade Policy, which carries a number of incentives for the traders.

The projections are based on assumptions that exchange rates will remain stable in 2003-04 there will be greater access to export finance and that domestic and external environment will not face any new challenges. The government expects to achieve exports and imports target to reduce trade gap.

The commerce minister unfolded an export strategy to achieve projected exports target for the current fiscal. The main features of the strategy include reducing cost of business, better market access, technology skills up-gradation, social, environmental and security compliance, encouraging export-oriented foreign investment, region-specific strategy, country and business image building, capacity building of exporters.

Under the policy, an upgradation fund is to be set up to finance initiatives for technology upgradation, social environmental and security compliance, setting up of waste water treatment plants, establishing agriculture export processing zones and hiring consultants in professional marketing.

The funds will be managed through public-private partnership and the Government of Pakistan will provide 3.74 billion rupees for the purpose. It has been decided that for technology upgradation and export marketing, consultancy services will be provided at the enterprises level on fifty-fifty cost sharing basis from the upgradation funds.



The policy provides for setting up of five more industrial clusters for sports and surgical goods in Sialkot; for auto parts in Karachi, for electrical appliances in Karachi and Lahore and for knitwear in Karachi and Lahore.

Ginners will be provided financial support out of upgradation fund for improving ginning process. The new trade policy envisages setting up of Export Promotion Bureau office at Gwadar and publication of a directory of IS certified companies in Pakistan. The Commerce Minister said it has been decided that WAPDA and KESC will allow off-peak hour rates for industrial consumers to reduce the cost of electricity for the industrial sector. A package of incentives has been offered to recognise and reward exporters who achieve higher performance in exports. It includes grant of civil awards and Prime Minister's Gold Medal.

A WTO directorate will be established in the Export Promotion Bureau with the purpose to create awareness amongst stake-holders and getting feedback on WTO related issues.

He said Agricultural Export Processing Zones are proposed to be set up at Sargodha, Rahimyar Khan, Mirpur Khas and Peshawar. Two special export processing zones will be set up at Karachi and near an industrial city of Punjab to focus on textile sector particularly in dyeing, processing and finishing sectors.

An Apple Treatment Plan would be established at Quetta for grading, polishing and packaging of the fruit. He said a comprehensive plan would be prepared to promote shrimp farming in Balochistan.

The trade policy 2003-04 has generally been hailed by the business community. They have welcomed the various incentive offered saying that the export target for the current fiscal year will easily be achieved. They are of the opinion that the new trade policy has provided vast opportunities for the business community and laid down a future line of action for them to grow and groom in the coming years.

The new policy can certainly be described as a major step towards reducing the trade deficit by maximising exports. Among the salient features of the policy are the establishment of industrial clusters and export processing zones, creation of a fund for technological upgradation, setting up garment cities to meet growing international competition and opening of warehouse abroad. While announcing the policy, Commerce Minister Humayun Akhtar Khan also pointed out on export promotion strategy. This includes, he said, reducing the cost of doing business, increasing market access, improvement of technological skills, social environment and security compliance, encouraging export-oriented investment, regional specific strategy, country and business image building, capacity building of exporters and greater value-addition. The policy also carries a number of new incentives for the exporters which should help them in boosting exports. The diversification of export goods and markets remain its essential elements.