July 23 - 29, 2007

Commerce Minister Humayun Akhtar Kan on Wednesday announced Trade Policy 2007-08 which envisaged exports and imports projections of US $ 19.2 billion and US $ 32 billion, respectively. The policy envisaged 6 percent R&D for home textiles and garment and leather footwear and 50 percent financial help for pharma export apart from other incentives.

Business leaders while reacting to the policy expressed mixed reaction, saying that the government must keep the reasons for not achieving last year exports target in view which we witnessed a shortfall of about one billion dollars. Lahore Chamber of Commerce and Industry (LCCI) President Shahid Hassan Sheikh said that the last year target could not be achieved due to high cost of doing business. However, special measures need to be taken and special focus should be paid to create exports surplus, which is only possible through supporting manufacturing sector. He also stressed the need for reducing mark-up rate and strengthening professionalism.

According to President Basmati Growers Association, Hamid Malhi, the steps announced in the policy seem to be good omen for the farmers. The long desired demand for setting up agri market structure to assist them in marketing their produces has been announced in the policy. The programme introduced in marketing integrated centres is also a step in the right direction, he maintained. However, he suggested that all issues relating to this programme be finalised in consultation with the active farmer organisations. Hopefully, this policy, if implemented in true sprit, will change the destiny of farmers. He appreciated the step for setting up refrigerated container pool with 200 containers for Karachi and Lahore each would help enhance export of perishable items.

Former LCCI President, Dr. Khalid Javed Chaudhary said that the policy needs to be implemented in letter and spirit. Though, the last year policy provided provision of 50 percent cost sharing for registration of pharmaceuticals in abroad could not implemented and thus failed to produce desired results. The Trade Policy should have envisaged maximum incentives for the pharmaceutical companies so that they could enhance medicines exports which ultimately fetched precious foreign exchange to the national kitty besides developing export culture in the country, he maintained.

Former President LCCI, Yawar Irfan expressed his dissatisfaction over the policy and said that it failed to meet our expectations. The policy did not reveal the measures to be taken in next year to reduce the trade deficit.

Moreover, the linkage between the local trade and industry should have been provided in the policy, he pointed out. According to former Chairman Pakistan Tanners Association, Agha Saiddain, the government did not include even a single proposal out of 17 suggested by the leather industry sector and thus disappointed the entire industry. Giving a comparison, he said that Indian Commerce Minister had also recently announced trade policy under which he compensated the exporters earning in Indian rupee due to upward revaluation of Indian currency. Agha said that Pakistan gives 1.24 percent rebate on the export of skin/hide of sheep and goat and 1.64 percent on cow and buffalo while India has announced seven percent for all the categories. Similarly, Pakistan government gives 3.22 percent export rebates on leather garment while India gives 11.04 percent. Moreover, Indian government had announced another scheme '' Duty Entitlement Passbook (DEPB) under which the exports would be provided 3 percent financial assistance on account of their taxes paid on utility and petroleum products''.