EXPLORING NEW MARKETS
CONCEPT MUST CHANGE FROM COMPETING TO COMPLEMENTING
SHABBIR H. KAZMI
Feb 14 - 20, 2011
When it comes to boosting exports from Pakistan, experts seem clearly divided into three distinct groups 1) insisting on capitalizing conventional products and conventional markets; 2) demanding higher unit price realization though value addition and 3) exploring new products and markets a little cautiously. Each group has its own rationalization for following the specific policy. One may wonder what could be the appropriate policy. However, there is a consensus that Pakistan should follow a comprehensive export policy with all the three constituents.
The reason for focusing con conventional products and markets is simple1) presence of Pakistani exporters in these markets for considerably long time and 2) better understanding of these markets. There is no fear of dealing with the aliens and even the overseas buyers are fully aware of the dynamics of Pakistan market.
On top of this there is an elaborate supply chain mechanism and even the buyers are fully aware of the dynamics of Pakistani market. Expanding the present market seems rather easy but many exporters forget a few harsh realities.
Entering a new market without the help on Pakistan embassies often prove fatal. Exporters also complain that the knowledge of commercial staff of the embassies is often very poor. Some exporters even go to the extent of saying that at time taking help of the embassy becomes a negative point as detailed are passed on the favorites. New entrants make tall claims but when the time comes for making a export shipment such 'fly by night' exporters not only bring bad name to themselves but also hurt Pakistan's image.
Though, Pakistan has embassies and consulates in many countries and millions of dollars are spent on TDAP and some other agencies for promoting made in Pakistan products, the success achieved is very low. Experts often say that appointment is embassies are on the basis of political affiliation rather than professional competencies. On such important position is the permanent representative of Pakistan at World Trade Organization. One of his primary responsibilities is to keep close contact with the officials of other countries. And the failure in understanding regular meetings and active participation if there is a fear of issue of call notice. He/she will also have to interact closely with the Pakistani exporters and the panel conducting investigations.
The latest example is that when Pakistan's case was presented before the European Union for grant of access and withdrawal of some if the duties applicable of other countries. Often made in Pakistan goods go not fall in the category of 'identical products' and having a small share in the total import of that particular item from Pakistan into that country 'establishing case for material injury is also impossible. However, Pakistani psyche of deferring the decision till last minute and asking the Government of Pakistan to tackle commercial issue though foreign office often prove counter productive.
Now many of the countries are going for outsourcing the jobs but Pakistani manufacturers often fail in concluding the deal, whereas India has become so powerful that the overseas buyers are not willing to divert part of the contract to Pakistan. The often quoted reasons are higher electricity tariffs and frequent outages, poor law & order condition. The perception about Pakistan is highly negative as compared to ground realities.
Till lately Pakistan was an exporter of urea and sugar but with the passage of time the country has become a net importer of these items. The country is still capable of producing exportable quantities but outrageous government policies have turned the country from exporter to importer of these items. If one spends a little more time many industries having ideal surplus capacities can be identified.
Many countries now demand ISO certification, certifications that certain types of dyes have not been used in printing of fabrics and tanning of leather. Many Pakistani exporters have tried to export red chilly and/or its powder but shipment were not cleared because chilly contained a particular type of toxin, mainly because of use of untreated sewerage water for irrigation.
It may also be said that Pakistani exporters often pay little attention about packing requirements and even food laws. It is the responsibility of TDAP, chambers and respective trade association to keep the members fully conversant about the regulatory mechanisms. Gone are the days when trade associations used to be more than active. After the phase out of textile quota regime they have hardly any role to play. Now the associations are used as platforms for personal projections and rule of the game is 'I scratch your back and you scratch my back'.
One of the serious impediments in enhancing intra-member trade is poor infrastructure. Be it trade between Pakistan and India, Pakistan and Afghanistan and Pakistan and Iran poor rail and road network emerges the biggest hurdle. Similarly trade among the SAARC and ECO members has remained nominal because of poor logistics. In fact many of these countries have the capacity to complement each other but are often termed competitors and ultimately emerge losers.
In fact, the preferred way forward should be first signing preferential trade agreements and then free trade agreements. Formation of such blocs and entering into preferential and/or free trade agreements is permissible. The most glaring examples are European Union and NAFTA.
Not much can be achieved unless animosity among the neighboring countries is removed. Aman Ki Asha is a good move but wish must become a reality. Unification of East and West Germanys must be kept in mind and then efforts should be made to deal with each other on equal footings. Any attempt to create hegemony could derail the entire process of economic cooperation.