The Commerce Minister, Humayun Akhtar Khan told
newsmen in Islamabad recently that he expected to surpass the current
year export target of $ 12.1 billion by the close of the financial year
by June 30, 2004. "Our efforts to promote exports are bearing fruit
as manifested by the expert performance during the first seven months
(July 2003 to January 2004) which showed an increase of 13.2 per cent
over the corresponding period last year," Mr. Khan claimed.
Exports in the first 7 months stood at $ 6.9 billion
which comes to over 58 per cent of the current year target. Now with
only one billion dollars exports a month the target of 12.1 billion can
be met. Certainly the exports will be significantly more than $ 1
billion a month strengthening our hopes to exceed the target, the
commerce minister was optimistic.
Imports during this period, however rose more sharply
then export $ 9.74 billion showing an increase of 16.2 per cent over
corresponding period last year. According to an analyst, rise in imports
indicated that the industrial activity is on track and latest figures
posted on the website of the State Bank showed that growth rate has
surpassed previous financial year level.
According to the breakdown of exports figure textiles
showed a recorded growth of 4.64 per cent in five months of the current
fiscal year, up from 3.51 per cent of the same period a year go.
Similarly leather products, pharmaceuticals, metal industries and
fertilizer sectors grew from negative trend to 42.60 per cent, 14.68 per
cent, 21.42 per cent and 7.77 per cent respectively. The growth in these
sectors will also help government to boost its revenue collection level
in the running fiscal year.
The country is seeking to export more to revive an
economy hurt by war in Afghanistan and three years of drought. The
central bank has cut interest rates charged for export finance six times
since November 2002 to 1.5 per cent from 13 per cent. The government
estimates that exports may increase 9.7 per cent to $ 12.1 billion.
Imports during these 7 months stood at $ 7.95 billion
showing an increase of about 16.2 per cent over the corresponding last
year against an increase of 13.2 per cent in case of exports leading to
a rise in trade deficit. At the end of January 2004, Pakistan trade
deficit was $ 9.74 billion as compared $ 6.96 billion in the
corresponding period last year. The reason for this is that imports have
risen more sharply than exports during this period. However, it is
heartening to note that major increase in import has taken place on
account of greater demand of meeting and raw material.
While exports have been showing steady increase in
recent years and foreign exchange reserves have reached an unprecedented
level of over $ 12 billion, the recent increase in trade deficit should
pose no big problem. But it is for quite some times that efforts have
been made to reduce the trade gap to zero to further strengthen our
balance of payment position. With this strategy the targets of exports
and imports were fixed. Now when the imports have risen more sharply
then expected, the growing trade deficit needs to be contained in order
to sustain and consolidate the strength and resilience that the external
sector of economy has required. As such export promotion efforts need to
be further accelerated.
It was apparent from what the commerce minister said
at the press that the authorities are fully cognizant of the situation.
The commerce minister said that the government was taking all possible
measures for promotion of exports through diversification of exportable
goods, search for new market, providing fresh incentives to the
exporters and protecting our exports and exporters' interests at all
international forums. He declared that Pakistan would use all available
forums to protects its exporters, including moving of the tribunal of
European Union, against its decision of imposing duty on Pakistan's
bedlinen. The government was fully alive to the situation arising out of
European Union's decision of imposing duty on its bedlinen export and it
has launched an aggressive diplomatic campaign to protect the exporters'
interest in the European markets. He termed bedlinen exports as an
important area which contributes significantly to help Pakistan achieve
its annual exports target.
Humayun said the European Union had also imposed duty
on Pakistan's bedlinen export in 1996 for a period of five years but
reversed its decision in 1997 as the decision was unjustified and
uncalled for. Now, once again, it was likely to make the same error by
imposing 13.1 per cent duty on Pakistan's bedlinen. The minister said he
was convinced that Pakistan deserves concession in duty on its bedlinen
exports to European Union. On the issue of abatement for basmati rice,
the minister said that Pakistan would keep on enjoying the concession
for at least one season as the Government of Pakistan and European Union
have reached an understanding on the issue. He said that political
change in Sri Lanka was the cause of delay in putting in place the Free
Trade Agreement (FTA) between Islamabad and Colombo. Pakistan wants
concessions from Sri Lanka for agricultural produces such as rice,
potato and onion, whereas in return Sri Lanka desires concession for