You really can't find much fault with the Strategic Trade Policy Framework (STPF) 2015-2018, baptised nine months after its due date. You don't find much good either. No 'oomph' to make the exporters take the next flight out to seduce the buyers with. It touches the right buttons, but so did all the earlier ones - and equally unlikely to make a difference. Understandable now why the Prime Minister's office sat on it for so long - hoping it will 'just go away'.
The $35 billion target has acrotism written all over - almost dead on arrival. The first year of STPF is likely to end up with an export figure of circa $23 billion. This means our exports will have to do what they have never done before: grow at the rate of 25% in each of the remaining two years. The Engineer never misses the opportunity to blame 'global recession' for our anaemic export performance. Is he now telling us that between his pillars and his enablers he has discovered the 'black swan' that will out-wit global recession? Or, has he been in denial throughout?
The STPF is salient in its indifference to Textiles that account for 60% of our exports. Either the Engineer thinks Textiles is a losing battle, or not his responsibility. But if textiles don't grow how will he achieve his target of $35 billion? He can't be serious if he thinks the focus sectors (Basmati Rice, Horticulture, Meat Products, and Jewellery) will grow fast enough to give us the additional $12 billion required to meet the target. Last we heard these four sectors together mustered a bare $1.6 billion! Never mind if we can't tell competitive advantage from comparative, or if we have the wherewithal to penetrate the target markets, but of this we are certain: it will take a lot more than creative engineering for these sectors to generate sufficient exportable surplus.
Even if we throw in all the non-textiles we would need the miracle of these sectors growing, cumulatively, at over 50% per annum to meet the target. Sorry, Sir, but there just isn't enough juice here for that to happen. Unless Textile exports register growth of 20%, each of the next two years, there is no way we will be even close to the target. Absent a holistic policy package for Textiles our only hope is a massive jump in international cotton prices. Time to pray!
The other deliverables promised by end June 2018 - improved competitiveness, transition to innovation driven economy, and increased share in regional trade - is pure sophistry. Nor do we find any robust underpinning of the laudable goals of value addition, branding, technological diffusion, product development aspirations. The sheer mendacity of the 'incentives' says it all: exports is not a priority for the government.
In a histrionic relief, the STPF is more farcical than spurious. Take the measures announced for Trade Facilitation. Even if we assume the Engineer has taken into account the challenges and extra cost of inter-modal transport, does he seriously believe we will have export-supporting rail and inland water transport initiated, much less completed, during the lifetime of this STPF? Or, take that mouth-watering dollop of 'linkages through EXIM Bank' to get a foot into new markets. What EXIM Bank? Or, consider the bit about full transfer of Export Development Surcharge. How will the STPF achieve what legislation (2005 amendment to the EDF Act stipulates precisely this) could not? The Engineer would have received loud cheers if he had simply announced the withdrawal of this surcharge that no longer works for Exports - and EDF funded buildings cannot masquerade as engines of export growth.
We are also intrigued with the emphasis on 'labour productivity'. Reminds us of the fellow exporter who when asked what he was currently exporting deadpanned 'Juice, Sir - of my workers'! Surely, the Engineer is not unfamiliar with the concept of Total Factor Productivity - labour is only a fraction of the equation; it is positive externalities like technology, managerial efficiency, and policy environment that really matter.
The problem that we have with SPTF is that the more sensible parts either do not belong here, or are there for cosmetic purposes. We fail to understand, for instance, why the Ministry's 'restructuring' should be a part of the STPF. Isn't this something that all Ministries are expected to do soon as they identify the need? What do Ministries who don't have STPF do? On a separate note, we are quite amused at the sudden revelation that 80% of the posts in MoC are of a 'technical nature'. Are we questioning the very architecture of Government, or is the real problem a singular lack of technical expertise in the attached departments, like TDAP, that the Secretariat is expected to draw upon?
The STPF is studded with such lofty ideals as transition from factor-driven to innovation-driven economy, using trade diplomacy to penetrate markets, product sophistication, brands, regional connectivity. Which previous STPF did not use the same cosmetics? Each faltered on the catwalk. Each failed to recognise the difference between policy and prayer.
We are no Interpreter of Maladies but see more of the same, instead of serious diagnostics. Will more Trade Offices, more Export Councils, more FTAs really cure the disease? What we do not see is even a passing reference to the now pernicious Exchange Rate, the debilitating effect of high protection rates on exports, the cardinal principle of zero-rating of exports, or the contours of a pro-export Industrial Policy that subsumes integration with global supply and value chains.
We are disappointed but not despondent; we believe in the Audacity of Hope. We do not know the stake-holders the Ministry consulted, unless they were the usual suspects, but this is no time for blame game. Too much turns on exports. Remittances and borrowings can at best be stop-gap arrangements, certainly not a substitute for export earnings, as the State Bank Governor so resoundingly advised at his peril. Mr Minister, let's work together. We propose that you set up a standing committee on exports, of no more than ten persons, under your Chairmanship. The Committee may consist of four exporters (textiles, food, engineering and pharma/chemicals groups), three retired bureaucrats (with experience of Finance, Commerce, and FBR) and two from the academia (with strong research background in Trade matters). [For the record, yours truly is not a candidate - he retains the right to critique the committee as well] Let's try to resuscitate this asphyxiated STPF. Let's get the Engineer his tool box back.
shabirahmed@yahoo.com