KP traders, manufacturers stress broad-based consultations to boost exports

PESHAWAR: Joint efforts from all government and private sector stakeholders were need of hour to redress the problems and issues being faced by Pakistani exporters.

The range of their issues includes constraints at the national and global level. Therefore, such joint efforts should be based on broad national consultation to determine key policy responses required to promote growth and convert Small and Medium Enterprises (SMEs) into the engine of growth.

These were the views expressed by current, past and potential exporters during a roundtable meeting titled ‘Achieving Export Competiveness in Pakistan’ held by the Sustainable Development Policy Institute (SDPI) here on Thursday.

During the meeting, exporters and representatives of the manufacturing sector identified a number of areas currently affecting the competiveness of Pakistani exports. Zahid Ullah Shinwari, President Khyber Pakhtunkhwa Chamber of Commerce & Industry, outlined issues related to energy sector and highlighted the lack of product and market diversification, especially heavy reliance on the European market, within the Pakistani export sector.

Adnan Jalil, former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), was of view that the federal government was unwilling to engage with local stakeholders while formulating relevant policies. He also highlighted gaps within taxation system as well as trade tariffs and called for an end to leakages in the form of corruption.

Experts from the public and private sectors on the occasion presented recommendations for corrective measures to the issues that were affecting the country’s export competitiveness.

Siraj ud Din, Director Trade Development Authority of Pakistan (TDAP), in this regard said that Pakistan’s exports have been under pressure for the past 3 years. He stressed the need for consolidating foothold in existing export markets to promote growth. In this regard, he emphasized the government’s commitment to diversifying the export sector and prioritizing marketing and trade promotion activities.

He urged that Pakistan must determine why it has not been able to achieve desired results from the European Union’s Generalized Scheme of Preferences (GSP) plus scheme in addition to its bilateral and regional trade agreements with partner countries such as China, Malaysia and Sri Lanka. He also recommended a greater focus on the export of services in addition to the near-exclusive focus on the export of goods. He felt this would ensure Pakistan’s rapid integration into regional value chains, especially given its abundance of young labor.

Steering the discussion towards Khyber Pakhtunkhwa (KP) province, Sabir Shah, Advisor at the KP Planning & Development Department, identified the different sectors in which the province enjoyed a comparative advantage. He stressed the need for the provincial government to develop sectoral policies that promote investment, adding that such a set of policies would be finalized by the provincial Cabinet by the end of November. He concluded that the federal government should consider strengthening the Services Export Development Strategy as an integral part of the broader Strategic Trade Policy Framework.

Earlier, Gonzalo J. Varela, Senior Economist with the World Bank Group, delivered a technical presentation highlighting the importance of trade as a vehicle of growth in developing countries over the last 30 years.

He explained that the exports of goods and services in Pakistan and other developing countries had grown exponentially since the 1980s. However, he flagged the downturn in Pakistan’s export sector in recent years, which he attributed to the country’s inability to fully harness its trade potential. In this regard, he stressed the need for effective policy initiatives to reduce tariffs and the cost-of-doing business in order to increase the competitiveness of Pakistani exports in international markets.

Speaking on the dynamics of export competitiveness in Pakistan, Dr. Vaqar Ahmad, Deputy Executive Director at SDPI emphasized on KP province’s vast potential in several sectors, including gems and precious stones, marbles, herbal and medicinal products, jewelry, dry fruits, meat products, and light engineering.

He urged TDAP to ensure that the province’s business community was fully participating in international trade delegations and exhibitions. The provincial government of KP also needs to incentivize foreign direct investment in exporting industries, he added. Further, the Ministry of Commerce will need to facilitate KP-based exporters in reaching non-traditional markets such as central Asia, the Far East and Africa.

He also stressed the need for providing infrastructure and state-of-the-art facilities within the special economic zones established under CPEC in the province. While discussing Pakistan’s trade diplomacy, he emphasized the need for ensuring that future Free Trade Agreements do not hurt local businesses in KP with high tariffs and duties on imports of raw material, machinery and intermediates inputs that are required by the exporting sectors.

He added that serious thinking was required at the policy level to improve transit and trade relations with Afghanistan, stressing the need for providing missing border trade infrastructure particularly at Torkham. He concluded that illegal and informal trade should be curbed to help local businesses and boost government revenues.