Export Growth | Editorial

PAKISTAN has seen a rapid recovery of exports since the removal of coronavirus-related restrictions. The country’s outbound shipments in recent months have actually risen faster than those of regional competitors Bangladesh and India. November shipments have increased to $2.1bn, the highest during the month in 10 years. The last time Pakistan exported more in one month was in May 2018. Cumulatively, Pakistan grew export revenues by above 2pc to $9.7bn in the first five months of the present fiscal from a year ago. Given the global slowdown in the midst of the pandemic, even this modest export growth may be something to celebrate. But does this short-term trend mean that the country’s exports have finally taken off? No. The medium- to long-term view continues to underscore export stagnation. We still have a very long way to go.

Stagnating exports have been a consistent source of worry for the economy for many years now as we find ourselves in the unenviable company of the 10 countries whose exports are less than 10pc of their respective GDP. An anti-export policy bias, incoherent export-enhancing measures, reliance on a narrow export base of very low value-added products and commodities, low labour productivity etc, are just a few of the many factors that are preventing Pakistan from taking off despite the trillions given in subsidies to exporters, especially the manufacturers of basic textiles. The government has implemented some reforms such as a reduction in energy prices for the export industries. It is also setting up an export development board under the Strategic Trade Policy Framework. Yet a lot more has to happen and export policies need to be reoriented before the country can get on the path of export-oriented economic growth, which has turned around several Southeast Asian economies and is fast changing our regional peer — Bangladesh. In order to move in this direction, the government will first have to ensure ‘equal treatment’ for all exporters. This anticipates that the same or similar incentives given to wealthy textile owners are also extended to, say, small IT firms and freelancers working for someone outside the country and bringing in dollars for product diversification. And this has to be followed up by formulating an overarching, coherent economic policy with a sharp focus on education, health and skill training with a view to boosting value-added exports. An illiterate and unskilled society has no respect or place in today’s global economy.

Published in Dawn, December 3rd, 2020

Source: https://www.dawn.com/news/1593738/export-growth

December 3, 2020

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