ISLAMABAD: Prime Minister’s Adviser on Commerce Abdul Razak Dawood has said that the government has set export target of $38 billion for the current fiscal year in consultations with the relevant stakeholders.
While addressing 1st Pharma Export Summit and Awards (Pesa) 2021 ceremony here on Wednesday organised by the Pakistan Pharmaceutical Manufacturing Association, he said that the government will try to take the exports of goods and services to $40 billion mark. Dawood expressed the confidence that the industries and the farmers will play their part to achieve the export target.
He said that the government envisaged taking pharma sectors’ exports to $5 billion by 2025. He added that the government was specially focusing to increase the pharma exports through tariff rationalisation, trade related investment, institutional reforms, and easing of business regulations.
He said more tariff rationalisation will be done in the next budget in order to facilitate various industries including the farmers. The “Made in Pakistan” marketing drive by the Ministry of Commerce is designed to promote Pakistan products in new markets, which will greatly help increase the volume of pharma sector exports.
Dawood optimistic about $50bn export target prospects
He said that Thursday (today), he has arranged a meeting of the PPMA leadership with Prime Minister Imran Khan, wherein, all matters pertaining to the pharma sector will be discussed. He said that the government was committed to provide a conducive environment to all the segments of the economy and will make all efforts in removing the obstacles hindering pharmaceutical sector’s growth.
He said that the exports are the engine of economic development. He suggested that the pricing of drugs and other medical instruments should be taken away from the Health Ministry, adding that the ministry should also not deal with commercial activities.
He said that he has requested PM Imran Khan that setting tariffs for the industry of the country should not be part of the Federal Board of Revenue (FBR) and now the Ministry of Commerce is dealing with tariffs.
He said that in tariff rationalisation, Federal Minister for Finance Shaukat Tareen has greatly helped the Commerce Ministry.
He added that the government will further rationalise the tariff in the next budget for the industry as well as for the farmers.
Speaking on the occasion, Khalid Mansoor, Special Assistant to the Prime Minister (SAPM) on China-Pakistan Economic Corridor (CPEC) said that the CPEC is all about industrial revolution in the country.
He said that under the CPEC, so far, $13 billion investment projects mainly power projects, infrastructure development and in Gwadar have been completed.
Mansoor said that $12 billion projects under the CPEC are in the pipeline which mostly covers industrial development and others.
He said the CPEC is now entering phase-II, which will focus on industrial cooperation between China and Pakistan, in the 2nd phase of the CPEC Special Economic Zones will be completed, which will help grow the overall economy.
He said that the pharma industry should take advantage of the Special Economic Zones.
Chairman Pesa and former chairman PPMA Kaiser Waheed, while speaking on the occasion said that he was associated with the pharma industry for the past 50 years and some years ago the government was not considering the sector as an industry.
He said that however over the past 20 years, the situation has significantly changed and the local industry has started growing, adding, now the local industrial units have 70 percent market share. In 2000, the country was exporting just $9 million pharma products but now exports have crossed $250 million mark.
Chairman PPMA Tauqeerul Haq giving the industry’s point of view said that in 2020, the pharma industry was valued at around $3.2 billion, which 10 years ago in 2011 was at around $1.64 billion.
The industry can be $5 billion worth within the next few years.
He said that the industry recorded a 24 percent growth in the first quarter of the current fiscal year as it exported over $68 million products.
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Further, highlighting the achievements of the pharma industry, he said that the sector has grown steadily over the years and without much help from the government.
The worth of the pharmaceutical sector was estimated to be around $3.2 billion in 2020, showing an increase of 200 percent over a period of nine years.
Exports from this sector of the economy were worth $218 million in 2019, up from $44.4 million in 2003.
Exports from pharma sector, as per the PPMA sources, saw a major increase in the first quarter of the previous fiscal year. And Pakistan’s pharmaceutical exports went up by 23 percent to $68.1 million during the first quarter of the current fiscal year of 2020/21.
However, despite these recent growth spurts, pharmaceutical exports made up for only 0.9 percent of the total exports in 2019 – which represents both a challenge and an opportunity.
The pharmaceutical sector of Pakistan has long been asking for the kind of government support that has been provided to other prominent sectors such as textile, and believes that the sector can have a meaningful contribution to Pakistan’s GDP – if such a support through concrete policy measures is made available.
Some recent professional publications argue the same.
“Including institutional sales, industry posits that this sector easily becomes a retail market worth US$4 billion,” a report titled “A Health Check for a Better Future: Unleashing the Potential of Pharmaceuticals in Pakistan” states.
The industry is currently struggling due to lack of chemical industry in the country, poor governance, electricity shortages, inconsistence policies of the DRAP that cherry picks policies from the world in the absence of a long-term drug policy, the report noted.
This above cited report was also of the view that the global pharmaceutical markets are going through major restructuring due to the ongoing pandemic, presenting an opportunity for Pakistan to enter the global “off-patent drugs market” that will be worth $700 billion in branded generics and $381 billion in generics by 2025.
Considering these facts, the pharmaceutical industry had made some viable recommendations to the government prior to the 2021 budget.
The industry recommended that the prices should not be regulated for drugs whose markets are competitive or monopolistically competitive.
Price regulation should only be there in the case of a monopoly or collusive oligopolistic behaviour. The industry also suggested that the government allows duty-free imports of all APIs (Active Pharmaceuticals Ingredients) and machinery for the both domestic and export market. This was granted in the budget as “to incentivize pharmaceutical products. CD and ACD have been exempted on 358 APIs, the raw material of auto-disable syringes and Remdesivir.”
However, much is needed, from the government, to streamline this vital industry; Pakistan being a country of 250 million offers a huge domestic market that can expand to provide products at competitive prices to Afghanistan, Central Asia, and Africa, if the government in Islamabad can come up with a well thought out coherent policy plan that focuses on both the chemical and pharmaceutical industries.
Copyright Business Recorder, 2021
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