Exports decline


Government officials are often seen making claims about taking the country towards export-led growth which indeed is the way forward to steer the country out of economic challenges on a permanent basis. However, unfortunately it is not happening at the moment.
Whilst the Senate was informed the other day that the exports witnessed peanut growth of two per cent in the first six months of current fiscal year but data of Pakistan Statistics of Bureau is more disturbing as the exports of our merchandise posted a negative growth during the last two months. Though the government was able to contract the trade deficit by reducing imports to fifteen per cent last month, but the decline in exports is certainly not a good news and this really warrants urgent corrective measures to reverse this trend. Textile exports, which account for 60 per cent of the total export revenue, are not showing any sign of recovery despite rupee depreciation. It is being anticipated that the textile exports may decline in the next two to three months as hundreds of exporter-oriented SMEs have stopped production owing to liquidity problems as they have not received their sales tax refund claims for the last seven months. There is need for massive reconsideration of policies and concrete actions on the ground to bring positive trajectory in exports. Firstly, the government must ensure speedy tax returns to the export industry and reduce duties on the imports of raw material and important machinery in order to enhance productivity of our existing industries. It is good to see that Adviser on Commerce Razaq Dawood is seeking preferential market access in different countries and regions but it should also be linked with the domestic production line. We really need to diversify our export basket and think beyond the low value added textile exports if we really want to substantially enhance our exports. The government should immediately unveil an industrial policy envisaging incentives and facilitation for the industrial sector. We really need to produce hi-tech and higher value products. Until the government pursues more active industrial and export policies, we can neither create sufficient job opportunities for our youth, nor can ensure sustainable economic growth and do away with balance of payments crisis.