While exports of the country continue to suffer and exporters are crying for some compensatory measures, government does not seem to be bothered about the deteriorating situation on this front. Chairman Pakistan Apparel Forum Javed Balwani and Chief Co-ordinator of Pakistan Readymade Garments Association Ejaz Khokhar told Business Recorder that "we are struggling against both internal and external factors and recent gain of dollar against Euro has been a blow to Pakistan's exports to EU countries." According to them, Pakistan's exports to EU countries are 60 percent in euros and 40 percent in dollars. As such, a strong dollar vis-à-vis euro does negatively impact on 40 percent of country's exports. They also revealed that in a meeting the Prime Minister had assured them to provide a level playing field against regional countries and resolve their problems in a week's time about six months ago but since then not a single issue had been addressed. There was a potential to increase exports of apparel sector to dollar 7 billion from existing level of dollar 4.5 billion if the industry was provided a level playing field. Khokhar attributed overvalued exchange rate, non-serious attitude of the government towards textile exports, liquidity problems owing to blockage of refunds by the FBR and high input costs as the primary factors for the loss of competitive edge of textile industry. Exporters had also lost credibility as reliable suppliers because the industry had been unable to deliver orders on time due to energy crisis. The government had been requested time and again to ensure supply of gas to the processing mills to help exporters to meet the orders but it was of no avail. Balwani also accused the government of having no realisation that Pakistani exports had suffered a decline of dollar 1.75 billion in the last six months. A lack of seriousness on the matter was evident from the fact that there was no minister of textile industry who could listen to the genuine grievances of an industry which contributes about 57 percent to total exports of the country.
It is no secret that Pakistan's exports have been mostly stagnant for the last few years, wavering around dollar 24-25 billion a year. The more worrying aspect was that they have even tended to decline during the recent period. According to a UN study covering the period from 1980 to 2011, while India's share of world exports improved from 0.43 percent to 1.7 percent, Bangladesh's from 0.04 percent to 0.14 percent, Malaysia's from 0.74 percent to 1.34 percent and Thailand's from 0.37 percent to 1.35 percent, Pakistan's share has remained stagnant at around 0.15 percent. It simply means that while other regional countries have been quite successful in expanding exports, Pakistan has miserably failed in this area of vital importance. Not only value of exports has stagnated over the years but export base and markets continue to be extremely narrow and products from Pakistan are extremely low-tech. While the situation on the ground calls for immediate policy actions to improve exports, the attitude of the government continues to be indifferent towards the evolving situation. It seems to believe that the bonanza of rising remittances and continued support from multilateral financial institutions and other sources is here to stay, without realising that these sources of financing external sector are either temporary or debt-creating while exports are not only a sustainable source of foreign exchange earnings but are also necessary for reducing unemployment, alleviating poverty and the best way to avoid expensive borrowings from abroad. Seen closely, most of the proposals of the industry to expand exports are fully justified. Almost all, including the Fund staff, agree that Pakistani currency is overvalued. The fact that US dollar has appreciated against euro has rendered our exports uncompetitive in the EU market despite the grant of GSP plus status. The insistence of the authorities to keep rupee at a particular rate against dollar has hurt exports and created a parallel foreign exchange market in the country. Inordinate delays in payment of refunds by FBR creates liquidity shortage in the market and is highly unjust. Input costs like that of electricity are higher than our competitors'. The most distressing aspect was that even promises of the Prime Minister to help the exporters were not honoured. If promises of the highest office are not abided, there is something seriously wrong with the government machinery. We could only hope that the government would be able to give the needed priority to this crucial sector of the economy. Of course, the government is pre-occupied with certain other important issues at the moment but the matter of expansion of exports is also too crucial to be ignored or postponed. It must be remembered that markets once lost are not easily regained.
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