ARTICLE: Fine, the title has nothing much to do with anything hereunder; unfortunately, imports should have been the title last week, and you cannot have two columns with the same title - at least, I think you cannot! "Jamais Vu" is there just for heck of it. Hey, creative titles increase readership! Or do they? The fact that our exports to Afghanistan are in the US$ 1billion range is news to me. If we want to promote regional trade, that is the direction for me. Neither north nor east!
The top destination for our exports is the United States of America, with a whopping exports value of US$ 3.8 billion. On the other hand, exports to our bestest friend in the world, China, are less than half of this, at US$ 1.66 billion; this slides China into a close second by just a fraction, with our exports to the United Kingdom being US $ 1.64 billion dollars. All numbers are for the year ended June 2020 from State Bank of Pakistan website, unless otherwise indicated - barring a statistical omission, i.e. the writer forgetting.
I am really not sure whether the good old US of A is our good friend nowadays, or Enemy Number 2 on this planet - enemy number 1, for my money, is eternally our bad neighbour in the east, currently ruled by a sick maniac. Irrespective of its social status, the USA is by far our top trading partner - even ignoring aid - with the net surplus with USA, considering exports to, imports from and workers remittance from, is a sizeable US$ 5.8 billion, approximately. Curiously, remittances from the USA went up by almost a billion dollars during this year- someone needs to figure out why.
If we go by popular wisdom, and accept that the Americans also have a say in what the Saudis do to or for us, then the combined economic equation improves further. Saudi Arabia was our top destination for workers' remittances - a magnificent US$ 5.4 billion - showing an improvement of US$ 400 million from last year. Kudos! Our import bill from them was down by roughly US$ 1.7 billion, probably because of deferred oil - something we may consider when we calculate the drop in CAD. Saudi Arabia is amongst the top three countries with which we have a trade surplus, the United Kingdom being the third. Let me assure you that we do not have a net surplus with very many countries in the first place! It was news for me at least that Malaysia ranks 5th in workers' remittances to Pakistan, which amounted to US$ 1.4 billion. I did not know Pakistanis even worked there!
Contrarily, our net negative balance with China, meaning a deficit, was approximately US$ 7.9 billion. And this year was not an anomaly: historically, we have been a lucrative market for the Chinese. I personally figure we have a not fond / no-no / love relationship with China - I'm not very fond of them exploiting our markets in the name of brotherhood for years - in the Garb of CPEC, them buying land, 100% owning businesses, and exporting Chinamen to us was another no-no; but what they did in Ladakh more recently has endeared them. And I am a normal patriotic Pakistani.
But perhaps blaming China for anything is being presumptuous; we ourselves went dancing naked in the market to get exploited. The fact that we borrowed relentlessly for feeding our consumption frenzy is the reason why we must kneel before one or the other. It is for this reason I opined that those who suggest lower tariffs and importing more freely in the name of innovation and productivity are next level economic Hit-men.
Even if throwing our businesses and industry to man-eating sharks was the only solution on this globe for improving our economy - which logically makes zero common sense - perhaps even then it would have been better to consume what we could afford rather than make a pact with the devil - Masters of the Universe. When you become subservient financially - and a debt of more than US$ 110 billion is exactly that - fighting a physical war becomes more and more difficult day by day; yeah, go ahead import more, and that too from the Eastern border!
Moving on: our net deficit balance with the UAE is US$ 117 million - workers' remittances from the UAE of US$ 4.6 billion paid for all the oil we imported from them. This is roughly the same position with the other GCC countries: workers' remittances pay for energy imported from them. This probably is the reason why the Government finds itself incapable of protecting PIA from the state-supported Gulf Airlines. However, even in that case, it would be better to call a spade a spade and come clean, rather than crucify PIA every chance you get.
Okay, we're out of space - whether or not I continue with this journey of discovery into our trade depends on whether I can dream up another great title or not.
And because it has become a habit: Imports - Jamais Vu.
(The writer is a chartered accountant based in Islamabad. Email: [email protected]. The views expressed in this article are personal. The views are not necessarily those of the newspaper)
Copyright Business Recorder, 2020
Comments
Comments are closed.