ISLAMABAD: Prime Minister Shehbaz Sharif has directed the Ministry of Commerce, the State Bank of Pakistan (SBP), the Federal Board of Revenue (FBR), and the Board of Investment (BoI) to bring an exports enhancement plan with an addition of $ 5 billion in exports target, sources close to the commerce minister told Business Recorder.
These directions were issued during the second stocktake on Strategic Roadmap held under the chairmanship of the prime minister. The prime minister has fixed deadline of each task given to the concerned ministries. The deadline for most of the tasks was December 25, 2022.
The SAPM on Government Effectiveness, Dr Jehanzeb Khan, provided an overview of the reform agenda by presenting an executive summary, saying that export indicators are below the target. The country’s Foreign Direct Investment (FDI) has declined by 61 percent. The power sector has met most of the targets but circular debt continues to pose a serious challenge.
IT exports: PM voices dissatisfaction
The Commerce Ministry says that export target for FY23 is $34.98 billion.
Secretary Commerce said that during the reporting FY22, exports targets of $31.8 billion could not be met due to challenges that include disruptions of import restrictions, floods, liquidity issues, inadequate SBP financial allocations, energy supply issues and high cost of financing.
Syed Naveed Qamar, the minister commerce added that there are domestic production issues that require immediate solution, adding that it is imperative to develop trade policies that encourage foreign countries to start investments in Pakistan.
In terms of exports markets access, action indicators such as Biennial review of EU GSP plus, Pak-US Trade Dialogue, Pakistan-Turkey PTA issue, and Look Africa policy are all completed within the set deadlines. The minister finance stressed that despite global economic recession, Bangladesh is still performing well. Sir Michael Barber agreed and stated that Pakistan can use the similar model (as of Bangladesh) to identify key areas for improving exports. The minister commerce also suggested that the SBP should provide 35 per cent export retention and allow the use of foreign currency accounts to improve IT exports. Sir Michael Barber added that PM’s efforts to seek investment from China, Saudi Arabia, Qatar, UAE, Turkey, UK, US, and EU must be actively followed up.
The secretary BoI briefed the forum on bilateral engagements and institutional reforms where the targets are not achieved. He suggested new ways to enhance the investment regime with Saudi Arabia, UAE, Turkey, and Japan. Refinery policy has already been shared with Saudi Arabia.
Moreover, the legal issue of Ajinomoto salt needs be resolved to address Japanese concerns besides resolution of impending issue of remittances of profits of Turkish companies. The final draft of Investment Policy will be submitted by the end of current month.
The prime minister directed BoI/SAPM on Government Effectiveness to follow up on MoUs signed in visits to other countries. The finance minister highlighted that the one-window operation needs to be immediately implemented to attract investments.
Power: Power Division likely to miss targets despite the fact that T&D losses are on target. Power Division has finalised feasibility study about renewable energy/solar initiatives and shared it with Nepra. The bidding process will start by the end of December 2022. The prime minister added that the Power Division should add one indicator regarding status on load management and development of a load management plan for the upcoming summer. Power Division should also coordinate with NEPRA to discuss and resolve ongoing tariff issues of solar initiative.
After detailed discussion and deliberation following decisions have been taken; (i) Ministry of Commerce in coordination with the stakeholders including Minister BoI, FBR and SBP to bring a set of recommendations by December 25, 2022 to enhance export target for FY 2022-23. The Prime Minister desired an addition of $ 5 billion; (ii) Ministry of Commerce in coordination with Ministry of IT&T and SBP to resolve the issues of small IT firms. Further facilitation on LCs for the telecommunication sector may be provided by the SBP. The Central Bank to consider the IT sector demand of retention of 35 per cent of IT export proceeds; (iii) Minister IT to make a detailed presentation on enhancement of IT sector exports; (iv) Secretary Power and Secretary Commerce to jointly work and develop set of recommendations on provision of energy at regionally competitive rates for export-oriented sectors; (v) Secretary Commerce and Secretary Finance to finalise the new DLTL scheme; (vi) Secretary Commerce to follow-up on recently signed trade concessions/trade agreements with various countries and update the prime minister (deadline January 2, 2023); (vii) Secretary BoI to submit plan to enhance FDI; (viii) FBR to expedite tax refunds of Turkish, Chinese, and Japanese companies; (ix) SBP to fast track the pending issues of remittances of profits of Turkish companies; (x) FBR to expedite the evaluation process of unverified tax an claims of Japanese companies; (xi) Secretary Law and Justice to resolve the legal issues related to ban on import of Ajinomoto salt by a Japanese company; (xii) SAPM Government Effectiveness/BoI to review/follow the progress on various bilateral agreements signed on potential FDI by the prime minister in recent months; (xiii) BoI to operationalise the one-window facilitation desk; (xiv) Petroleum Division to finalise the pending Refinery Policy and finalise FDI projects with KSA; (xv) Secretary Law and Justice to finalise the foreign investment law and creation of Investment Ombudsman Office; (xvi) PA&SS to finalise the mechanisms on new payment system and complete pre-launch arrangements by end of January 2023; (xvii) Minister BISP, SAPM-Youth Affairs and Secretary to PM to coordinate on the placement of BISP undergraduate scholarship program with SAPM-Youth Affairs; (xviii) SBP to coordinate with PA&SS Division on the facilitation for opening up female bank accounts; (xix) Secretary Power to add indicator on status of loadshedding; (xx) Secretary Power to make a detailed presentation to the prime minister on load management plan for upcoming summer; (xxi) Secretary Power in consultation with Secretary Finance to resolve issues related to foreign exchange requirements for imported coal; (xxii) Secretary Power to present update on implementation status on 10,000 MW solar initiative and measures to curb power theft to the Prime Minister; (xxiii) Power Division to complete the feasibility study of solar power project at Muzaffargarh; (xxiv) Secretary Power to coordinate with Chairman Nepra on tariff issue of PM’s solar initiative and; (xxv) Power Division to finalise pre-bidding requisites and roll out RFP for solar initiative by end December
Ministers for Finance, Power, IT, Commerce, PASSD, Special Assistant to the Prime Minister on Government Effectiveness, Special Assistant to the Prime Minister on Strategic Communication, Governor State Bank of Pakistan (SBP), Secretaries Power, Finance, IT and Telecom, S&T, NFS&R, BoI, PASSD, Special Secretary Power, Special Secretary Commerce and Sir Michael Barber, public policy specialist also attended the meeting.
Copyright Business Recorder, 2022
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