“Our foreign policy is one of friendliness and goodwill towards all the nations of the world. We do not cherish aggressive designs against any country or nation. We believe in the principle of honesty and fair play in national and international dealings and are prepared to make our utmost contribution to the promotion of peace and prosperity among the nations of the world.
Pakistan will never be found lacking in extending its material and moral support to the oppressed and suppressed peoples of the world, and in upholding the principles of the United Nations Charter”—Quaid-e-Azam Muhammad Ali Jinnah.
Our foreign policy is inspired by the guiding principles laid down by the Father of the Nation. The Foreign Office is fostering friendly relations with countries around the globe presenting Pakistan as a dynamic, progressive, moderate, and democratic Islamic country.
It is entrusted with the responsibility of safeguarding national security and geo-strategic interests. With the rapidly changing world dynamics and economic interests at the center of all bilateral partnerships, an inclusive foreign policy crafted to complement sustainable development is the pathway to Pakistan’s future. Hence, a robust foreign policy can help stimulate economic growth and consolidate our commercial and economic cooperation with the international community.
However, this goal cannot be achieved without ensuring an enabling environment at the domestic level so that businesses can flourish and progress.
Export proceeds are the only viable solution to bridging the gap between foreign currency inflows and outflows. The unwise policy of continuous reliance on debt instruments is anti-growth.
Borrowings are neither cheap nor sustainable, thus, a comprehensive multidimensional strategy is required to increase Pakistan’s exports.
International trade has reached new heights and scales over the last few decades. With transformation in technology and better infrastructure, the world has turned into one big marketplace where everyone can showcase and sell commodities without any restriction of physical boundaries.
This evolution has helped countries boost their economies, leading to higher income levels and reduced poverty. However, Pakistan has not been able to benefit from rising levels of global trade.
According to International Monetary Fund (IMF), Pakistan’s exports peaked at about 15% of GDP in 2003, but started showing a declining trend since 2011, and currently are hovering around 11% of GDP.
Similarly, the export volume growth is at a standstill since FY 2007. Hence, Pakistan’s global exports share has declined by almost 40% since the early-1990s to only 0.13% of world exports in 2020. This is because of multiple factors.
Pakistan’s export basket consists of standard non-technological items like textiles, clothing, vegetables, food products, and animal hides and lags behind on evolving technological trends. Based on export receipts statistics for fiscal year (FY) 2021-22, the textile and vegetable product sector constitute almost 70% of the export proceeds.
Further, the portfolio of items offered i.e. the number of unique products exported has declined over the period. Pakistan exported 2,824 unique products in 2019 compared to 2,987 in 2009. Further, the cost of inputs is constantly increasing in Pakistan, as borrowing rate is above 15% per annum, and inflation is even higher than 20%.
Moreover, the import-based inputs are restricted and businesses are finding it difficult to keep their business cycles running with such unprecedented challenges. Exporters are continuously losing their competitiveness.
The government needs to support small and medium enterprises (SMEs) and encourage new and small exporters. They should be trained in international best practices to meet the required standards for export.
Trade bodies and relevant ministries must facilitate them in discovering the relevant markets for their portfolio of items; the public and private sectors must work together to invest in training and human resource associated with the export industry. The government must help businesses, especially SMEs and new startups in the export market to comply with international standards to secure the required certifications.
Based on data for FY 2021-22, Pakistan’s exports seem restricted to a few jurisdictions having failed to explore new markets to expand the export volume. Statistics show that top five countries constitute 50% of Pakistan’s total export proceeds with the United States of America (USA), like in previous years, taking lead with an export value of US$ 6.798 billion followed by China at US$ 2.78 billion, the United Kingdom at US$ 2.2 billion, Germany at US$ 1.7 billion, and United Arab Emirates US$ 1.6 billion during FY 2021-2022.
(To be continued on Sunday)
(Huzaima Bukhari & Dr. Ikramul Haq, lawyers and partners of Huzaima, Ikram & Ijaz, are Adjunct Faculty at Lahore University of Management Sciences (LUMS), members Advisory Board and Visiting Senior Fellows of Pakistan Institute of Development Economics (PIDE). Abdul Rauf Shakoori is a corporate lawyer based in the USA and an expert in ‘White Collar Crimes and Sanctions Compliance’. They have recently co-authored a book, Pakistan Tackling FATF: Challenges and Solutions)
Copyright Business Recorder, 2022
The writer is a lawyer and author of many books, and Adjunct Faculty at Lahore University of management Sciences (LUMS), member of Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE). She can be reached at [email protected]
The writer is a lawyer and author of many books, and Adjunct Faculty at Lahore University of management Sciences (LUMS) as well as member of Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE). He can be reached at [email protected]
The writer is a US-based corporate lawyer, and specialises in white collar crimes and sanctions compliance. He has written several books on corporate and taxation laws of Pakistan. He can be reached at [email protected]
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