STPF 2015-18: A review — II

During last six years, we have hardly concluded any new FTA or regional trade agreement (RTA), with any country or region to boost our trade through trade diplomacy. One of the major reasons for our stagnant export value is non-availability of trade surplus and non-availability of credible data of different sectors of economy as to whether they can meet local demand and also export globally.

Goals set under the head ‘Regional Connectivity’ have not been achieved. Pak-Afghan Transit Trade Agreement has been revised in 2018, but it is not very effective in curbing smuggling from Afghanistan back to Pakistan.

TIR Convention still not implemented due to low-priority on its implementation. Restructuring of Ministry of Commerce (MoC) and TDAP was declared as an essential step to align them with the goal achievements as implementing arm of government.

But administrative posts are reserved only for officers from Administrative Service cadres. Non-professional, non commerce& trade (C&T) group officers are managing Ministry of Commerce. In STPF of 2015-18, two barriers were cited as impediments to achieving STPF goals; one was non-availability of professionally competent manpower.

Read the first part here: STPF 2015-18: A review — I

The MoC is managed by a number of officers from Secretariat, Customs, Inland Revenue Service and Pakistan Administrative Service groups officers and except technical wings like Trade Policy Wing, Domestic Commerce Wing, or Director General Trade Office which are being manned by C&T group officers in Commerce Ministry.

Secondly, the postings of C&T officers abroad are also subject to quota restrictions. The lucrative posts in Europe and the Americas are assigned to officers from other influential service groups. C&T officers are posted to remote and under-developed parts of Africa & Asia.

It is not known whether the total amount of Export Development Fund (EDF) is being allocated to MoC by Finance Division, as till 2015, average 20% of EDF was allocated to MoC, for export promotion activities, which is collected as 0.25% on export stage at ports. Exporters have been demanding allocation of EDF for promoting the exports consistently.

The role/status of 11 (eleven) training, Common facility Centres and products development institutions, being funded by MoC/Ministry of Textile, is still not known. Efforts were initiated by MOC to revamp their training curriculum and training machinery.They have become center of all respective trade bodies’ politics by establishing the Association’s offices there and doing little for the export promotion.

Likewise, two new Export Development Councils were to be established namely;

(i) Pharmaceutical & Cosmetics Export Promotion Council

(ii) Rice Development & Export Promotion Council

But it is not in anybody’s knowledge that whether these institutions have been established or not. But in the current STPF, some new export councils have also been mentioned, but would they be materialized?

In order to help domestic industry in overcoming their energy needs, some regulatory amendments in import policy of 2013 were made to promote ease of doing business and one very strange measure was import of plastic waste & scrap & import of shredded tyres as a fuel for industrial units.

This single provision speaks volume of level of knowledge of our policy makers, that they allowed these highly hazardous carbon omitting products to be imported in the county under some loose restrictions, which could be hoodwinked by vested interests at import stage, and thus risking the lives of millions of people in Pakistan. The present smog and worst air quality level are the results of these un-mindful government policies.

The fate of four (4) focused products namely, Basmati Rice, Agriculture, Meat & Meat Products & Jewelry, as focused areas of export enhancement strategy is also unknown. Such policy statements have not been made public or made available to public at any portal of any Ministry or Ministry of Commerce. It is not known how much support in terms of financial subsidy to promote Basmati Rice in the Middle East, including Iran, has been made? It is also not known how many warehousing facilities for agro products in Iran and Saudi Arabia have been provided? These are very cogent and pertinent questions to be answered by MoC’s top brass, if we really want to move forward.

For horticulture like mango, kinow, potato, onion and fresh vegetables, in order to promote these products, support for international certifications was to be provided through establishing Pack-Houses & Vapor Treatment Plants, and market channels with International Chain Stores. The net outcome of these measures is also not available at any forum for public consumption, except our total export value of around US$ 24 billion till June 2021.

The potential of meat and meat products exports is a mis-estimated option. The prices of poultry & halal meat of goats and cows are astronomically high in Pakistan due to their short supply in local market. Without having reliable data to prove that export surplus is available in these areas we are misplacing this product in our priority area. Jewelry export is a long cherished dream and our achievements in this area are still very insignificant. The net value of our jewelry is still around 200-300 million dollars.

The above detailed analysis of STPF 2015-18 has sought to explain how the targets set under this document were almost completely missed. The reasons for failure have also been explained and now we expect that perhaps we may make a real shift towards achieving the set targets in the new STPF released and adopted by the Federal Government. We hope the new framework will not disappoint the export sector of Pakistan. We will discuss the New STPF in our next article.

(Concluded)

(Sajid hussain is retired senior officer of commerce & trade group. His last posting was Executive Director General, Trade Dispute Resolution Organisation, till April 2020.)

(Dr. Ikram-ul-Haq, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellows of Pakistan Institute of Development Economics (PIDE))

Copyright Business Recorder, 2022