A number of Pakistan's trade missions abroad, including those in South Africa, Kenya, Saudi Arabia, Bangladesh, Thailand, Iran, Uzbekistan etc, have reportedly sent suggestions to the ministry of commerce designed to increase exports from Pakistan to these countries, urging that the upcoming trade policy should also include these suggestions for implementation.
These suggestions include both long and short term measures to increase the volume of exports through exploration of new markets, specially in the African countries, and secondly through improvement of Pakistan's image in terms of the quality of products. It has been noted that Pakistan's exports have successfully penetrated the African markets specially in Kenya and South Africa.
One of the suggestions emphasises the need for increasing exports of parboiled rice to South Africa by rapidly increasing the number of parboiling facilities with necessary machinery imports from India and manufacture of the same in Pakistan. It may be mentioned here that the Rice Exporters Association in Pakistan has lately confirmed the prospects of increasing parboiled rice exports to different countries.
In this context, there is need to expeditiously increase the number of rice parboiling plants in the country as the surplus production of rice for export is quite sizeable. Pakistan has also been facing tough competition in rice exports in the recent years, and thus new openings for the export of parboiled rice should be fully exploited with desired measures for diversification.
A policy measure adopted by South Africa to make its automobile industry export-oriented has been recommended for adoption in Pakistan as well. The plan allows duty-free import of those cars which are not manufactured in South Africa.
The imported cars are re-exported to other countries with minor alterations by the local automobile industry. Other suggestions include starting a special container service for shipments to Bangladesh in addition to promoting joint ventures in textile and engineering sectors in that country, which should be backed by lines of credit to the Bangladesh companies to import machinery from Pakistan on deferred payment basis. A similar recommendation has been made for offering supplier's credit to Uzbekistan for importing engineering goods, including textile machinery from Pakistan.
In the case of Thailand, it is emphasised that a free trade agreement should be finalised by Pakistan as early as possible to increase the volume of bilateral trade between the two countries.
The trade mission in Iran has suggested opening of border trade facilities for traders of both the countries which would also help to curb the on-going smuggling of goods into Pakistan from Iran. It has also been proposed that single-country exhibition should be organised by the Export Promotion Bureau in Iran with a view to increasing the volume of bilateral trade between the two countries.
The suggestions from Pakistan's trade missions abroad, it is felt, would prove helpful to the commerce ministry in the preparation of the trade policy for the current financial year. It may be pointed out here that observations made by most of the trade missions pinpointed the high cost of production in Pakistan's industries and consequent difficulties in competing with the goods from other exporting countries.
The cost of production has been the major factor impeding significant growth in Pakistan's exports in non-traditional markets. The problem of high cost of production in Pakistan's industries could be traced to several factors, including the high cost of electricity as compared to neighbouring countries.
This aspect would have to be addressed on a long term basis with suitable policy changes by the government on several fronts. These are all sensible ideas, but Pakistan's trade missions abroad are also supposed to concentrate on extensive market research to identify the scope for Pakistan's traditional and non-traditional exportable items.
This kind of research appears to be conspicuous by its absence in the recommendations of most of the trade missions. Moreover, the missions are expected to closely follow trade policy changes in the countries of their accreditation and forewarn the government and the private trade bodies in advance on the possibility of adverse impact on Pakistan's export flows, but this aspect has also been left unattended so far in most cases.