Pakistan exports target of $ 35 billion by 2018 achievable: Report
APP Feature By M.Ali Asghar
LAHORE: (APP) The government is taking effective steps on all fronts while exploring every aspect under a multi-pronged strategy to achieve country's ambitious export target of US dollars 35 billion by 2018.
This could be well-judged by the government's initiatives of Rs 180 billion incentive package for exporters,besides speedy completion of energy generation projects under the China Pakistan Economic Corridor (CPEC) zero-rated regime for top five textile sectors, besides encouraging up-gradation of existing industrial units including allied and vending industry.
Other incentives such as zero load-shedding for industry; revamping of transport infrastructure including railway system,motorways and other road networks; besides focus on new products and destinations are also a part of this multi-faceted strategy to achieve the targets.
Exports in Pakistan increased to Rs 186.384 billion (USD 1.78 billion) in January 2017 from Rs 180.899 billion (USD 1.73 billion) in December of 2016.
Monthly exports in Pakistan over the last few decades averaged at Rs 38.82359 billion (USD 0.37 billion), reaching an all-time high at Rs 275.483 billion (USD 2.63 billion) in September 2013. .
Pakistan's main exports are: 19 per cent mineral fuels, 19 per cent manufactured goods; 13 per cent beverage and tobacco. Others include: 11 per cent food and live animals; 11 per cent crude materials; 11 per cent chemicals, 8 per cent machinery and 8 per cent miscellaneous articles.Main export partners are: 13.6 per cent United States,11 per cent China, 8.5 per cent each to United Arab Emirates and Saudi Arabia.
The government is targeting USD 35 billion exports by 2018 and endeavoring to improve the trade situation of the country including zero-rated sales tax regime for top five textile sectors to bring down industrial costs for the value-added textile sector and help increase their exports.
Prime Minister Muhammad Nawaz Sharif gave Rs 180 billion incentive package to exporters to boost the country's exports.Under the package,sales tax and customs duty on import of textile machinery and cotton have been abolished.This will not only boost the exports and our products competitiveness in international market,but also lower the cost of doing business.
A number of projects of power generation through hydel, coal, solar, wind, and other resources were being initiated under the CPEC investment, beside many others being financed by Pakistan government to ensure availability of cheaper electricity on sustainable basis. The government is committed to add 10,000 megawatts electricity to the system by 2018 and 30,000MW within the next few years.
To boost transport infrastructure Pakistan Railways is also being revamped and upgraded with US $ 8 billion investment with the improvement plan envisaging to double the speed between Karachi and Peshawar.A network of roads, highways and motorways is being laid at a cost of Rs 1000 billion to integrate different regions of the country.
Keeping in view the fast developing China-Pakistan Economic Corridor (CPEC) the government is encouraging the local industrialists to upgrade their industrial units including allied and vending industry of the country besides product value addition to cope with possible challenges set to arise with industry's expansion under CPEC.
Trade Development Authority of Pakistan (TDAP) Director General (Sub-Regional Offices Punjab) Mian Riaz Ahmed told APP that TDAP was working to increase exports holistically while taking aboard all stakeholders.It was also building coordination with respective public-private sectors,taking up products value addition, encouraging export-oriented foreign investment and joint ventures, besides trade diplomacy in the key global markets for Pakistani products and services.
Mian Riaz Ahmed added that TDAP was also focusing export products diversity as well as increasing product base and reducing dependence on traditional products and markets.
He explained that TDAP was focusing new exports destinations including Mexico, Central Asian States, African countries and Doha, while regularizing banking channel with Iran, Masco and other countries that would definitely jack up sale of Pakistani products and services abroad. Pakistan was also taking measures to capture a major share from USD 3 trillion global market of Halal Foods, he said and mentioned that UAE had lifted ban on poultry imports from Pakistan after eight years.
TDAP Director General said,"We have added IT sector in our exportable services. We are also putting things in order for skill development of labour force, and TDAP had established Cutlery Institute at Wazirabad for training,research and skill development".
At Gujrat, an Export Display Centre had been established under public-private partnership to showcase exportable products manufactured in Gujrat, Gujranwala, Wazirabad and Sialkot,for foreign buyers,he cited.
Lahore Chamber of Commerce and Industry (LCCI) President Abdul Basit appreciated government's initiatives on various aspects to stabilize exports.
He, however, called upon the government to take further steps in this direction,citing that cost of doing business is another factor leaving Pakistani industry uncompetitive in the world market."This issue could be addressed through provision of inexpensive energy to industry and reduced customs duty on raw materials of export-oriented industry".
He suggested that government should develop common export cluster facilities for firms producing technology-intensive products to enable SMEs in medium/high technology sectors to complement each other's resources and expertise.
According to Global Enabling Trade Report 2014, he mentioned, Pakistan ranked 88 in the availability of trade finance so establishment of a separate bank was indispensable to provide export finances/loans/credit on soft terms along with other services to exporters for rapid growth of exports.
Abdul Basit also stressed the need to diversify the exports in terms of markets as about 60 percent of Pakistan's exports go to ten countries namely,USA,China,UAE,Afghanistan,UK Germany,France,Bangladesh,Italy and Spain.
"There is ample potential for increasing exports to large dynamic world markets, where Pakistan was an under achiever i.e. South America, Africa, Central Asian Republics (CARs) and Russia where the combined share of Pakistan exports was less than 10 percent of the total exports of Pakistan. The commercial sections of Pakistan embassies in these aforementioned markets should showcase country's exportable products in collaboration with the chambers of commerce", he maintained.
Development of specialized/other skills is also crucial to ensure availability of skilled labour force.Also, competent engineers and managers for the industrial units were required to adopt new technologies to manage complex production processes in developing the products demanded internationally.
Lahore Chamber President advised the government to also train the people on costing and pricing; process control; export market brand strategy; market research; market access requirement; online marketing, export marketing strategy, export documentation; packing and packaging standards.
He pointed out that viable strategy/infrastructure was needed to achieve growth in agro-based exports, as various agricultural commodities were not able to realize their tremendous export potential due to lack of quality testing facilities.
Development of post-harvest and cool-chain facilities were also of paramount importance to extract full value from fresh produce by preserving the quality and enhancing shelf-life of agricultural commodities from harvesting to their arrival at the market.
"Pakistan can also enhance its exports by tapping the tremendous potential of Halal Foods, which are one of the fastest growing markets in the world with a share of more than 15 per cent (more than US$ 3 trillion) in the world trade," he added.