PM Advisor reveals good news on the economic front for Pakistan
The Advisor to the Prime Minister on Commerce and Investment, Abdul Razak Dawood, held a consultative meeting at the Ministry of Commerce (MOC) to discuss Pakistan’s Global Trade in Services for the First Half of the Financial Year (FY) 2020-21
The advisor was apprised at the meeting that was attended by the ministry officials that during the period July to December 2020, Pakistan’s total exports of services stood at $2.844 billion as compared to $2.835 billion during the same period last year. He was told that the imports of services had declined by 15.7 percent to $3.821 billion from July to December 2020 as compared to July to December of 2019. ------------------------------
In the Insurance & Pension services that had increased by 21 percent, the Financial Services by 26 percent, the Telecommunication & ICT services by 40 percent, and the Other Business Services (like Consultancies) by two percent.
Furthermore, he was notified that the exports of the Travel and Transport Services had been adversely affected by the pandemic and had declined by 28 percent and 18 percent respectively.
However, these sectors are likely to improve after the pandemic subsides.
Dawood acknowledged with satisfaction that Pakistan’s services exports had finally turned around during July and December 2020 and had started exhibiting positive growth.
He remarked that the Services play an important role in everyday life, that they have a central place in both domestic and international economies, and that they account for the bulk of the global Foreign Direct Investment (FDI) and trade. He added that they connect countries to the international trading system by facilitating supply chains and e-commerce.
The advisor opined that the most significant increase in the exports of the services had been in the Telecommunication & ICT services which had increased by 40 percent to $958 million during July and December 2020 as compared to $684 million over the same period last year.
“The ICT Exports will soon become a very important sector in Pakistan’s total exports, and I am optimistic that these would cross the $2 billion mark in the current financial year”, he declared.
The advisor also noted with satisfaction that the trade balance in the Services sector has improved significantly during the first six months of the current financial year.
The trade balance had stood at negative $977 million during July and December 2020 as compared to negative $1,697 million during the same period in the previous year, thereby showing an improvement of 42 percent. He said that this would contribute significantly to the improvement of the Current Account Deficit (CAD).
The advisor was briefed that workers’ remittances all over the world are included in the exports of services as they fall under Mode 4 of the World Trade Organization’s (WTO) classification of Services Exports which relates to the presence of the natural persons of a Member in the territory of any other Member.
He was also informed that the true impact of Pakistan’s Services Exports could be conceived completely if the workers’ remittances are included in the export of services as per the WTO practice.