ISLAMABAD - Pakistan current account deficit stands at $32.6 billion today — this is the highest it has ever been. It implies that we have imported goods worth $32.6 billion more than our exports. Such a huge import bill makes us more and more reliant on foreign aid and has left us in the proverbial ‘debt trap’ for most of the country’s existence.
The government’s statistics for the quarter ending April 2017 show that our external debt has crossed the $75 billion mark.
These indicators are all pointing towards severe discrepancies in Pakistan’s international trade policy, including strategies to benefit from global supply chain of goods and services and to tap new markets.
What is worrying is that our trade indicators continue to dwindle despite a Free Trade Agreement (FTA) with China, and GSP Plus status in the European Union — not to mention that the United States remains our biggest export market. Though the government had not too long ago trumpeted that the Pakistan’s Stock Exchange (PSX) has been upgraded to the Emerging Markets Index, but this achievement has yet to help us bring down our exorbitant import bill and pursue import substitution policies.
Against this backdrop, it is of crucial importance that we can maximise our potential returns from the China Pakistan Economic Corridor projects.
If we cannot build export capacity in the short-run, we can still benefit from becoming a hub for not only Chinese logistics but also Chinese production units. We should promote interaction and connectivity among our industrial sectors and their counterparts in China.