The economic managers are confident to come up to the expectations of the Prime Minister

Oct 03 - 09, 2005

Prime Minister Shaukat Aziz has asked the authorities concerned to take initiatives to achieve 100 percent increase in the country's exports during the next five years, bringing it to $ 28 billion from over 14 billion during the financial year 2004-05.

The economic managers are confident to come up to the expectations of the Prime Minister to push exports by over 20 percent annually during the next 5 years. They believe that the target is within the reach if seen in the backdrop of about 85 % growth in exports during the last 5 years.

Target for exports during the current fiscal (2005-06) is $ 17 billion- more than 20 percent higher achieved during the last year. Prime Minister has repeatedly observed at different forums that the country's export potential is much higher and the government is prepared to provide all help and incentives to fully harness this so far neglected potential.

Laying the foundation of export display center of Islamabad Chamber of Commerce and Industry, he observed that "the export earning during 2004-05 was well below the full potential". Our exports can be substantially increased by articulating a sustainable response to the newly emerging challenges of a liberalized global trading system, he said, adding that the government is focusing on expanding the export base and exploring new markets in order to achieve an export target of $ 28 billion in the next five years. He pointed out that we need to produce competitively priced quality goods in order to get the maximum share in the international market.

To increase Pakistan's share in world trade, a two-pronged approach is being adopted, by crating an enabling environment to promote exports and encouraging new products to be competitive in world markets. The government is engaged in negotiating preferential trade arrangements and free trade agreements with several countries to boost exports, he observed.

At a time when more and more countries are striving to boost their export earnings, Pakistan hopes for a quantum jump in it in foreseeable future, as expressed by Prime Minister Shaukat Aziz. It may be noted that while appreciating the role of the business community in achieving the targets of exports in previous years, he made no attempt to hide his expectation of Pakistan being able to achieve a $ 30 billion export target in next five years. While urging businessmen to take full advantage of investment-friendly policies, he asked them to explore new markets while taking pains also to improve quality and standards of their exportable products. As for the government's contribution to meet the challenges on the export front, the Prime Minster made reference point to the early prospect of setting up two export processing zones, one each in Sindh and Punjab, besides upgrading the Karachi Export Zone to provide maximum facilities to exporters, to help them play a more active role in strengthening the national economy through enhancement of the country's export earnings.

More to it, while saying that another export processing zone would be set up at Gwadar, the country's third, he also elaborated upon the government's enabling measures, including liberalization of economic policies and provision of optimum incentives and facilities to the business community. There can also be no disputing his assertion that due to positive investment growth in the country, there has been an increase in the export of widening range of products. Reference, in this regard, may also be made to his convincing observation that the very fact that the unit value of the rupee has remained at the level of last year makes clear indication of the export efforts put in by the private sector.

It will, however, be noted that now that more and more countries are trying to boost their export earnings, it is going to be increasingly difficult for all to raise exports to the desired level, because of intensifying competition in the international market. This should become all the more understandable in view of the added emphasis on improved quality, proper packing and production of value added items with affordable prices. Needless to point out, it will be not easy for countries like Pakistan to work out such a combination of factors.

First and foremost, reference may be made to the task of producing goods at affordable prices, more so in an increasingly competitive world market. This refers, basically, to higher than normal cost of production in Pakistan as further accentuated by uncertainties regarding availability of not only raw material but also of numerous other items associated with production. Further, the high cost of utilities and too frequent changes in taxes, along with flawed operation of duty and tax refund schemes related to export, one is apt to realize how very challenging has become the task of increasing export earnings. Mention may also be made here of the predicament of agro based industries from the unending conflict between the growers and the manufacturers. This has relevance to the state of affairs of the textile and sugar sectors of the industry having such a strong export potential. The prospects of big boost in exports are very much there, but existence of the factors impeding the pace of progress cannot be ruled out either. It will, therefore, be in the fitness of things to work out an unfailing export plan from an objective approach.

In fact diversification is the name of the game for Pakistan because so far our 70 percent exports are confined to textile sector alone. It is the time to concentrate on new strategies to ensure better results. Reference in this regard may also be made to advisability of adopting innovative approaches, like the ones being adopted in Africa by some of the advanced countries. Surely there is enough scope for export of various non-traditional products. But, then recourse will need to be taken to new, imaginative measures. This has reference, among other things, to a newly emerging system of facilitating import in some countries, by eliminating the requirement letter of credit and carrying the export cargoes to the destination and then selling them to local bulk buyers in local currency. This will, necessarily, mean involvement of our banks in the transactions but it can prove worthwhile. Diversification in our exports regime with innovation and imagination is what is essentially required to achieve the desired growth in exports.