SATURDAY DECEMBER 22: $95 billion export target envisaged: policy framework approved by Prime Minister

ISLAMABAD: Prime Minister Raja Pervez Ashraf on Friday cleared a three-year Strategic Trade Policy Framework (STPF) 2012-15 with the Planning Commission and Finance Ministry finally extending support to the Commerce Ministry's draft after six months. The Commerce Ministry, which was being criticised for preparing a flawed trade policy, has heaved a sigh of relief.
"Al-Hamdolillah all of our proposals have been approved by the Prime Minister and other stakeholders and now we are waiting for the Cabinet's approval, to be held very soon." The Commerce Ministry envisages $95 billion export target in three years which is challenged by some of the stakeholders, but the political government wants the policy to go through as its tenure is ending latest in three months.
Initially, the Commerce Ministry had sought Rs 60 billion for a three-year STPF but later revised it downward to Rs 20 billion. However, the Finance Ministry maintained that it could not extend more than Rs 10 billion for this purpose and only Rs 2 billion for the current fiscal year, said Abbas Khan Afridi, Minister of State for Commerce while talking to Business Recorder.
However, Prime Minister approved a budget allocation of Rs 5 billion for the Ministry of Commerce. He also directed the Finance Division to submit a summary to the Cabinet for streamlining Export Development Funds (EDF) so that its proceeds could be utilised for promotion of exports as the Commerce Ministry was furious over negligible releases from EDF by the Finance Ministry.
The Prime Minister has approved the setting up of Export Promotion Leather Council and Services Exports Development Council. For the first time, the Commerce Ministry has proposed to set up Domestic Commerce Wing to promote domestic commerce which was not a priority of any past government and credit for this goes to Deputy Chairman Planning Commission, Dr Nadeem ul Haq. Minister for Commerce. Abbas Afridi is also a key supporter of development of domestic commerce.
According to official documents, the Trade Policy also envisages extending support for setting up meat processing plants in provinces and tribal areas near or bordering Iran, Afghanistan and Central Asian Republics (CARs), with the objective of promoting meat exports; support is also to be extended to drying and processing plants for fruits and vegetables in Gilgit-Baltistan and Balochistan.
Services sector contributes 54 percent to the economy but export of services from Pakistan is very low. Our services exports stood at $5 billion in 2011-12 whereas the global trade in services was $18.2 trillion. To tap the enormous potential of export of services, especially to Asia, the ministry proposed creation of a foreign trade wing for services in the ministry and a special task force for facilitating development of e-commerce.
The Commerce Ministry argues that the energy shortage has resulted in closures and under utilisation of capacity and has acted as a disincentive for new investment in export sector. In consultation and support with Ministry of Water and Power and Ministry of Petroleum, it proposes to allow the installation of Captive Power Plants running on coal, conversion of gas fired captive power plants to coal and installation of coal gasifiers for SMEs. The Commerce Ministry also provided ad hoc relief to offset the impact of higher cost of utilities for Pakistani exporters. The Trade Policy further states that units manufacturing items meant for 100 percent exports may be exempted from electricity and gas loadshedding.
Product development to meet international demand remains a cornerstone of any country's export promotion strategy. The Commerce Ministry has proposed to introduce the following product and market development and diversification initiatives. Salient features of the policy comprise institutional interventions, export development initiatives and regulatory amendments. The policy envisages mark-up support for future import and purchase of machinery and export finance scheme for selected export sectors, ad hoc relief at 3 percent of FoB to offset the impact of high cost of utilities in selected sectors and setting up of Exim Bank and Land Port Authority.
According to official statement the meeting was informed that the total Halal food market in the world was estimated to be around $1 trillion, which can be tapped for increasing exports. It was further informed that Goldman Sach's had identified Pakistan as one of 11 emerging economies in the world.
Some of the key decisions taken at the meeting are as follows; (i) allow import of complete ambulances duty-free;(ii) ease of doing business, procedural simplifications , 20 amendments have been suggested in import and export policy order...principal approval of the Prime Minister; (iii) reforms in the present institutions of MOC; (iv) implementing emission standards; (v) ensuring quality & standards - ensuring imported goods conform to the domestic standards; (vi) checking import of stolen goods; (vii) Domestic Commerce Reform and Development Wing in MoC and; (viii) establishment of Services Trade Development Council.