HOW TO ENVIGORATE EXPORTS

With the liberalization of financial sector, which offers access to financing at a massive scale, the large scale-manufacturing sector is coming up fast on the economic map of the country.

AMANULLAH BASHAR
July 24 - 30, 2006

The export strategy for financial year 2006-07 is mainly focusing on a Rapid Export Growth Strategy (REGS), which primarily and rightly laying emphasis on the regional diversification of export markets, strengthening of trade promotion infrastructure and early provision of modern infrastructure.

For these purposes, the government has announced the replacement of Export Promotion Bureau with Trade Development Authority of Pakistan (TDAP). Actually, cotton and textiles rule the export regime in Pakistan, contributing over 67 percent of the total exports from the country.

It is good to capitalize the available resources like cotton through value addition, yet it amounts to putting all your eggs in one basket. Though the government has always kind to facilitate the exporters with maximum possible incentives, yet these incentives did not transform into optimizing potential of available resources.

With the liberalization of financial sector, which offers access to financing at a massive scale, the large scale-manufacturing sector is coming up fast on the economic map of the country. However, this growth in the manufacturing sector has not been utilized for enhancing our exports in the real sense. The prominent among the growing sector in the manufacturing sector is of course the emergence of a strong automobile sector.

The automobile industry has successfully attracted investment both within the country as well as from abroad. The auto sector including huge two wheelers is heading towards the level of economy of the scale. Here is the time when our economic managers are required to apply the slogan of "Economic Diplomacy" given by President Musharraf. Pakistan is now in a position that it can ask the investors coming to the auto sector either to enter in a buy back agreement for at least 30 percent of the products or to export at least 30 percent of the locally produced automobiles as well as the two wheelers.

Our engineering sector is now very close to forming a strong industrial base and capable to compete in certain markets especially in African countries, East European countries and of course in the Central Asian states, besides some SAARC countries.

Effective July 1st, SAFTA has come into operation. Being a member of this bloc Pakistan's trade and industry can play a major role by entering this market at a massive scale especially for the exports of non-traditional items. TDAP should take the SAARC market as a challenge because the purpose of creating TDAP, a new entity is to enhance the current shares of major international markets. This new organization has been given the task of exploring new markets through proactive export promotion, developing exporters' capabilities and capacities to compete and improve product range and quality to achieve sustainable value addition, besides achieving access to bilateral markets aggressively.

The freight subsidy at 25%, which was announced during 2002-03 with the objectives to achieve geographical and product diversification, will also continue during the FY2006-07 in a slightly modified shape. The government has also decided to continue with 6% compensatory rebate to readymade garments and knitwear as research and development support. In order to creating an enabling environment, a reduction in cost of doing business with special emphasis on simplification of temporary export procedure and reducing bureaucratic delays and impediments and proactive customs and infrastructure facilitation would be undertaken.

A specialized SME Export House would also be established as a corporate entity with public and private partnership to facilitate SME sector to cope with the lack of the capacity to export. The trade policy also contained the construction of specialized coal, clinker and cement terminal at Port Qasim to facilitate the export of surplus cement. It is anticipated that in view of the rapid expansion by almost all cement producing units, a glut like situation may hit the cement industry in the face of an over-supply scenario in the domestic market in the coming years.

The policy sets an export target at US$18.6billion, depicting an increase of 13% over US$16.4billion actual export level of the passing year, whereas the imports target has been set at US$28bn, US$200million higher than FY06's figures at US$28.2billion. This represents a trade deficit for the year FY07 at US$9.6bn portraying an 18% decline over the last year's deficit of US$11.8billion.

IMPORTS ALSO TO FACILITATE EXPORT

The import policy for the year has been based on the considerations of liberalization with a view to ensure an economical supply of machinery and raw material to the local industry along with facilitation of the import items that are required to enhance public welfare. The import of certain used machinery and equipment for construction and petroleum sectors has been allowed provided that it is not older than ten years. During federal budget 2005-06, the government had announced the zero-rating of customs duty and sales tax in marble and granite, poultry and meat, gems and jewelry, horticulture and pharmaceuticals sectors. This year also the government has announced the reduction of custom duty on some marble and granite machinery, and on horticulture and floriculture machinery to zero percent and reduced duty on horticulture raw material, pharmaceutical, heat ventilation, air-conditioning units and on imported raw material for footwear. These sectors have significant export potential and reduction of these duties will help boost investment. Besides, greater import of manufacturing machinery and industrial raw materials would gear up domestic production and ultimately promote exports.

MESSAGE

Governor State Bank of Pakistan's message on the occasion of 3rd export Trophy Awards Ceremony

I am pleased to learn that the Rice Exporters' Association of Pakistan (REAP) is holding the third Export Awards Ceremony in Karachi on 29th July 2006. This is a reflection of their ongoing efforts to promote Pakistan's rice exports.

In order to accelerate economic development in general, and exports in particular, various initiatives have been taken by the Government. Structural reforms have been implemented despite the complications posed by rising international oil prices and natural disaster like the earthquake of October 2005. These reforms have started to show visible results and have set in motion an economic transformation in various sectors of the economy. In the agriculture sector particularly, it is encouraging to see that producers have responded positively to the increased access to credit, private sector participation has led to pricing advantages in major crops, and the non-farm sector (e.g. livestock and dairy) has contributed to the overall sector growth. Accordingly, both farm and non-farm activities have gathered momentum. Moreover, the growing demand, led by improving credit access and export supportive polices, has enabled the industry to achieve a higher level of capacity utilization.

Rice is one of the major contributors in primary commodity exports. The performance of rice exports has been remarkable, In this regard, the services of Rice Exporters Association of Pakistan (REAP) and the efforts of the Government of Pakistan, in encouraging tapping new markets and restoring the confidence in Pakistan Rice will continue to increase due to its excellent quality.

In order to further promote rice exports, I would urge REAP to focus on improving branding & packaging of the product, enhance existing and introduce modern storage facilities, and explore new markets for rice exports. I wish the Rice Exporters' Association all the success in introducing and implementing new ideas to promote rice exports.


Message

Haji Abdul Majid
Chairman Rice Exporters Association of Pakistan (REAP)

Being an eternal optimist, and having complete faith in my fellow members and workers of the Rice Exporters Association of Pakistan (REAP), I have no qualms in saying that like the previous few years, the Association's performance this year too was nothing less than exemplary. To gauge the verity of my more than satisfactory tone, it would be suffice to mention that this year, the REAP has exported Rice worth One Billion US dollars, no mean feat by any manner of means.

But, of course, it wouldn't be going overboard if I didn't acknowledge the hard work that's been put in by officials and workers of the Rice Exporters Association of Pakistan in the last 12 months. They worked day in and day out to make the Association's working a smooth and hassle-free one.

I must also extend my gratitude to His Excellency President Islamic Republic of Pakistan, His Excellency Prime Minister Islamic Republic of Pakistan, Ministry of Commerce and the Export Promotion Bureau, who have encouraged the Association all along. In fact, they've been doing so ever since the inception of the Rice Exporters Association of Pakistan.

In the end, I would like to say to the diligent Managing Committee Members and staff of the REAP that they should carry on with their good work.

Regards, Chairman REAP


Message

Vice Admiral Ahmad Hayat
Chairman, Karachi Port Trust

I complement the Rice Exporters of Pakistan on achieving new thresholds of success. The third Export Award Ceremony is a testimonial in itself of the milestones that the Association has achieved both for the Country as well as for itself. This distinction comes your way through your resolute effort, hard work and selfless dedication. This combination is a sure recipe for achieving the highest pedestals of success and satisfaction.

I congratulate and extend my best wishes to all Rice Exporters but more so to those who are being awarded recognition today. I also congratulate the former and the present management of REAP for their extraordinary and sincere efforts which places REAP in frontline of trade bodies. Karachi Port Trust has been supporting REAP to facilitate rice exports in every possible way, since it's inception in 1989. I assure continued cooperation and assistance in the future also. There may be some spots which may need added shine, but I am confident this will come progressively. It is now evident from your achievements that for the best possible rice export trade the involvement of REAP has become a must. Larger Exports means better returns for the farmers and a better economic future for the country. We at KPT realizes this fact with utmost care and importance and consequently lend it export the highest level of Care and importance.

On behalf of Karachi Port Trust, I wish Rice Export Trade Association all the best for the coming years.