Pakistan is likely to miss the export target of $27 billion, ending June 2013, according to stakeholders. One of the biggest impediments in achieving the desired results had been non-professional approach of Trade Development Authority of Pakistan (TDAP) and Pakistan Horticulture Development and Export Company (PHDEC).
Stakeholders believe that appointment of a dedicated commerce minister by the new government could help in overcoming the inertia displayed by the two organisations in boosting country's exports. These bodies have remained dormant and devoid of professional approach in meeting their jobs.
A strong push could help may help not only in meeting the set targets but also help in increasing foreign remittances, they said.
CEO Harvest Trading Ahmad Jawad told Business Recorder: "The commerce ministry had set an ambitious exports target a time when country was facing long hours of power outages and absence of professional policy by the TDAP and PHDEC for the betterment of export in their respective domains.
National economy, he said had been grappling with acute energy shortages, which have hit the industrial sector for the last few years, while global demand is also not encouraging. Pakistan has been losing about 1.65 percent of its GDP every year due to the energy crisis, which in absolute terms equals to around US $ four billion. Its times we look forward on alternatives to over come the energy crises, he said adding that government must announce duty free solar panels for our industry to encourage businessman to setup in their businesses with the option of two years easy instalments from the banks.
He said, if we take a look on our neighbouring country India, they achieved $300 billion from export in FY 2012-13; their target was US $350 billion. Here we see a huge difference in exports of two countries and may analyze the seriousness of both countries commerce ministries.
We must keep in mind that agriculture is the main sector which could push country's export target subject to a developed infrastructure at their producing hubs.
Jawad said that among the many factors responsible for our dismal exports are decades of protectionist policies have rendered local industry uncompetitive and inefficient. A protectionist policy works if it protects an infant industry; but protecting mature industries simply does not make sense and is not sustainable.
After a period, protections should be taken away so that these industries could stand on their own feet and compete with global corporations. India has used protectionist polices very effectively and their exports which were just US $23 billion two decades ago have grown by 15% per annum on average. This is clearly disproportional, if compared with their GDP which is nine times ours, but they export 16 times as much as we do.
In addition, we have very few Free Trade Agreements (FTAs) with trading partners, which could provide private sector greater access to other countries and regions. For the last two decades, nearly 20 FTAs were signed globally on average every year. Till date, Pakistani private sector has access to only four. Among the FTAs we have signed, out of SAFTA agreement signed in 1994, we have only a 10 percent share of total trade, while 90 percent is split equally between India and Bangladesh. Further we have a poor in-country logistics network, which hurts the growth of both imports and exports. Utilization has also remained extremely poor in the case of South Asian Free Trade
Currently we have a dilapidated railways structure, road network lacks reach and is in poor condition, and there is no online tracking system for goods in transit to smaller cities. Our port and airport charges are the highest in the South Asian region: Port Qasim and Karachi Port charges are estimated to be three times that of Sri Lanka's and seven times of Singapore's.
Jawad also mentioned that we urgently need to streamline and improve the efficiency of our customs operation. It is a proven fact that the faster the clearance times of imports and exports, the larger the volume of overall trade. There is empirical evidence that indicates that overall trade gets close to, or in many cases exceeds, 100 percent of GDP if goods' clearance time falls below 3-5 days.
"We need to prioritize enhancing exports in the country's policy dialogue. On a fair share basis, our exports based on our GDP size should be in the range of US $180-200 billion," he said.