STPF 2020-25: A review—I

Under the head “export diversification”, which is an oft repeated cliché in the vocabulary of Commerce Ministry, the Strategic Trade Policy Framework Review (STDF 2020-25) says that after conducting a detailed bench-marking study, specific policy interventions will be made to enable the industry to steer towards consolidation so that industrial sector could expand and enhance their technical know-how to produce high value goods. This shall be done through platform of Sectoral Councils where there is evidence of comparative advantage and needs to be exploited.

The provision of conducive business environment, expenditures on innovation (R&D), human capital and Foreign Direct Investment (FDI) can help develop the sectoral clusters. Through G-I (Geographical Indication) Act, various products will be identified by Intellectual Property Organisation (IPO) Pakistan, for registration of G-I marks.

Market diversification is a dream in all the STPFs, but still we have not been able to find new markets for any of our products in last two decades. On the one hand, the document speaks of a plan for next five years, but on the other, it quotes the adverse effects of Covid.

The market diversification of our products has been described as a corner-stone of new trade policy framework through reaching South Asia, Central Asia, Africa, South America, Russia and South East-Asia, by Ministry of Commerce (MoC) and Trade Development Authority of Pakistan (TDAP) and Foreign Missions abroad.

But, historically speaking, none of these links to enhance trade like Ministry itself, TDAP or Foreign Missions has failed to achieve the desired goals due to posting of non-career trade officers, lack of financial resources and knowledge of trade promotion strategies, non-coordination between our Trade/Foreign Mission and trade community in the accredited countries and back home.

It is a ‘run and chase’ policy which is in motion since last 40 years, without producing any tangible results. The entire meagre rise in export figures is historical rise, with the passage of time or efforts of local business community to fetch export orders and earn foreign exchange.

There is no fillip of continued government policies for the business community in their marketing efforts internationally except for participation of a few business houses in selected international expos by providing subsidized booths by TDAP.

STPF authors are full of good intentions and have used fancy words such as “road to invention and innovations is dependent upon public sector actions”. The document speaks of formulation of yet another strategy to introduce Fourth Generation Industrial Revolution in Textiles, where innovative products would be identified and incentives will be introduced to initiate production through seeking support in technology up-gradation and transfer.

Now a cursory look at these good intentions reveals that such jargons had been part of previous policies as well but nothing concrete had been achieved due to lack of continuity in the incumbency in commerce ministry of top management and multitude of other factors.

A lack of resources, absence of persuasion by the framers of policy, a lack of will of government due to poor lobbying by the top policymakers at MoC to persuade the other wings of government like finance, planning, science & technology, Ministry of Food & Agriculture, and academia to adopt these policies and to work together were the other factors.

In the previous policy framework of 2015-18 (reviewed earlier), four export development councils were envisaged but they were never materialized on ground, and even the areas which were identified earlier as engines of growth have completely been ignored or forgotten in the present document. These are leather, rice, horticulture and light engineering goods.

Branding has been accepted as a new way of marketing and it has two levels. The branding of a country like Pakistan, which is characterized as producer of low quality products in bulk and thus earning foreign exchange through volumes.

Under this vision, MoC aims to promote the country as Emerging Pakistan by show-casing the country as a producer of good quality products and diversity at its disposal to launch Pakistan as a progressive country which is ready to integrate in global value chain, and Ministry wows to provide support to exporters to either acquire international brands or develop their own brands. But there are no details available as to how and how much has been earmarked to undertake such ambitious designs.

There are certain additions to this STPF 2020-25 in the form of annexures which lay down the details and the milestone and the responsibility which is spread over almost 30 to 40 pages. The STPF takes into its ambit Textile Policy, E-Commerce Policy, National SM Enterprise Policy, Agriculture Growth Development, Service Sector Development like Digital Technologies, Demographic Changes, Rising Per Capita Income, Climate Change and how will they effect the service sector, as these factors have a significant role in relation to cross-border trade and FDI. Knowledge-based & skill-oriented activities are likely to get a boost in enhanced share of service sector in world trade.

In Pakistan, Information Technology, Logistics, Transport, Distribution and Tourism have been identified as potential service sectors. But to harness all these sectors, the consultations with relevant ministry/departments to chalk out action plans would be undertaken in future, whereas they were supposed to be done before the launch of this document. Emphasis is still on undertaking these activities in a future tense, so its fate is hanging in balance.

(To be continued)

(Sajid Hussain is retired senior officer of commerce trade group. His last posting was Executive Director General, Trade Dispute Resolution Organisation till April 2020 and Dr Ikramul 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