Commerce Secretary Shahzad Arbab on Friday expressed serious concern on protracted delay in clearance of Strategic Trade Policy Framework (STPF) 2015-18 which was submitted to Prime Minister many months ago.
In a briefing to a poorly-attended Senate Standing Committee on Commerce, headed by Senator Shibli Fraz, Secretary Commerce also hinted that the export target of current fiscal year (2016-18) will not be achieved because of global scenario and dependence only on traditional items.
"STPF has been approved by the committee headed by Finance Ministry and is lying in the Prime Minister's office for the last many months and now we are anxious at the delay," he added.
Secretary Commerce informed the committee that Prime Minister Nawaz Sharif has urged concrete measures to enhance exports, adding that Prime Minister is not satisfied with measures to turn around exports. "We have prepared a paper for the Prime Minister on export enhancement which will be sent to him on Monday," he added.
According to insiders, Prime Minister has scrapped the 'unconvincing' STPF 2015-18 but Commerce Ministry has not yet received anything in writing on this issue.
Standing Committee was apprised that the Commerce Ministry had set an export target of $95 billion for 2012-15 but achieved $74 billion, which implies that the shortfall was of $21 billion.
Shibli Fraz, the only panel member, quizzed Commerce Ministry team whether the export target of 2016-17 will be achieved, Secretary Commerce said that it is very difficult to say that target will be achieved.
He maintained that exports of traditional items like rice, cotton leather etc are declining and referred to his chat with one of the key exporters of leather products who, according to him, claimed 40-50 percent decline in export of leather products.
The Secretary Commerce stated that the global share of textile products is merely 2.5 percent of total global exports and Pakistan's share is 64 percent. The share of engineering sector in our exports is only one percent whereas the share of engineering products in global exports is too high.
Answering another question, Secretary Commerce stated that collection of Export Development Surcharge (EDS) at 0.25 percent which is around $4-5 billion is deposited in an account of Finance Ministry and has never been totally disbursed to Commerce Ministry.
"We have recommended in STPF that the control of EDS should be given to the Commerce Ministry," he added.
Commenting on non implementation of ad-hoc relief @ 3 percent of FOB to offset the impact of higher cost of utilities for Pakistani exports in selected sectors announced in STPF 2012-15, Commerce Secretary said that this incentive has not been implemented due to scam of subsidy release in TDAP, adding many officers are behind the bars in the subsidy scam.
According to the presentation on STPF 2012-15 given to the committee, most of the announced fiscal incentives remained unimplemented.
The schemes which have not been implemented are as follows: (i) Marketing Development Assistance for regional countries; (ii) export promotion campaigns of agro- processed products; (iii) encouraging opening retail outlets; (iv) subsidising 50 percent cost of plant and machinery for dates and olive processing; (v) subsidizing 50 percent cost of plant and machinery for establishing processing plants for fruits and vegetables in Gilgit Baltsistan(GB); (vi) up-gradation of rice inspection labs; and (vii) mark-up subsidy @ 50 percent of prevailing mark-up rate, for setting up of meat processing plants in bordering provinces etc.
Joint Secretary Commerce, Export/ Import, Muhammad Ashraf briefed the committee that consultation with the relevant stakeholders on establishment of Leather Export Promotion Council and Services Export Council has been completed.
Chairman Standing Committee expressed concern on decline of services export by $1 billion during 2012-15.
During a discussion on establishment of Pakistan Land Port Authority (PLPA), the committee was informed that it is in the process of being established. FBR is taking lead role in the establishment of PLPA.
The committee was informed that the project will be completed in three years with a funding of $50 million from ADB. It has already been decided to upgrade Torkham and Wagha transit points.
The Secretary Commerce apprised the committee that inflows and outflows of 1500 containers daily have been recorded at Torkham and there is no space to deal with huge inflows and outflows. The government has acquired 400 kanals of land of which some land is owned by the Army aimed at expanding Torkham transit point.
Presently, 14 border points are notified. Governor KPK has written to FBR to increase the number of border points.
Commerce Secretary further revealed to the committee that the interim board of Exim Bank meant to promote exports, has been notified. Deputy Governor SBP and senior officials of Finance Ministry and Commerce Ministry are board members. An amount of Rs 7 billion out of total Rs 10 billion paid-up capital has also been released by the Finance Ministry.
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