It really depends on your state of mind. Most stakeholders today are cautiously optimistic about the Pakistani economy, or what this column called being “cautiously delusional”. On the one hand is the graduation to emerging market status in the MSCI index, on the other hand is the burgeoning current account deficit and no sign of a turnover with muted remittances, falling exports and rising imports.

Many lament the trade deficit (which grew by 40% in 10MFY17) and point at imports as the culprit—but the pressure is building largely because of back to back ill-conceived export policies and an over-valued currency. In fact, mounting imports are the only sign that the economy is in fact growing because majority of imports constitute of capital goods (machinery, equipment etc.) used for construction, power generation and CPEC related paraphernalia while oil imports are also seeing an up tick.

The export package has offered no reprieve; and value-added textile manufacturers (which earn a good buck in the EU markets due to the GSP plus) believe it or not, still complaining about government not releasing refunds. It is a vicious cycle that keeps repeating with no solution in sight. How does a cash strapped exporting sector grow exports?

Whereas the government claims that there is no industrial load shedding, many businesses disagree. Moreover the cost of energy and other similar rents that accumulate continue to make exports uncompetitive. Total exports in value fell by 2 percent in 10MFY17, with rice and other good exports falling by 9 percent, and manufactured goods in the SME sector including cutlery, fans, surgical, footwear, auto parts, sport goods, leather goods have also fallen together by 3 percent. Meanwhile, margins in the value added textile sector are thinning.

The Central Bank imposed a 100 percent cash margin policy for hundreds of imported items considered “luxury” including vehicles, to hedge against the increase in capital goods imports. That policy may have worked depending on just how cautiously delusional one is. Imports went up by 20 percent in 10MFY17; and fell by 0.2 percent between March and April of 2017.

Capital goods are now 23 percent of all imports (19% in 10MFY16), while oil is 20 percent of all imports. These two are largely unavoidable.

Palm oil imports are much needed and coming through Indonesia at cheap rates due to the trade deal with Pakistan.

For some reason, a heavier duty was imposed on soyabean oil which has reduced those imports (since Pakistan can clearly not produce all the soyabean oil we need, read our stories on the subject) but it seems any forthcoming import duties are only to discourage imports and shore up revenues without any strategic thought process going into it.

The export package of Rs180 billion launched in January was meant to provide relief to exports but the outcome has been sobering. As we have said earlier: “Even if the package helped in providing cheaper inputs, or financing, or give better rebates, there are too many barriers to exporters to develop, introduce technology, and become competitive in foreign markets”. Not that exporting sectors are getting rebates and refunds in time.

There is a simply no strategic policy focus on trade, and exports continue to get the small end of the stick. As we near the end of the fiscal year, let this be a lesson and a New Year resolution for the government: thou shalt not give random incentives and export packages while imposing duties on imports without also doing the harder work of coming up with a coherent policy that addresses the myriad of concerns the industries are facing today.