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With exports falling, spending on foreign trade offices jumps

ISLAMABAD: Govern­ment spending on running 54 trade offices in more than 30 countries jumped by more than a quarter in the previous fiscal year.

Official documents available with Dawn show that government spending on overseas trade offices rose 27.3 per cent year-on-year to Rs1.71 billion in 2016-17. The bulk of the expenditure was on salaries, repair and maintenance of offices.
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The primary function of trade offices is to promote exports that have persistently been falling for some time now. Pakistan’s exports during the preceding fiscal year dropped 12pc to $20.802bn.

In the year 2016-17, the government allocated a budget of Rs6.267bn for all the departments that promote trade, a rise of 3.7pc as compared to the previous year.

In comparison to the expenditure on trade offices, government spending on running five important institutions that promote domestic commerce fell 21pc to Rs1.346bn in 2016-17. The allocations bear the running cost of offices and employees-related expenses, including salaries.

The five bodies include: the National Tariff Commission (NTC), Directorate General of Trade Organisation (DGTO), Pakistan Institute of Trade and Development (PITAD), Trade Dispute Resolution Organisation (TDRO) and Trade Development Authority of Pakistan (TDAP). They work to improve supply line, increase competitiveness of exportable products, and facilitate and promote domestic commerce.

The budget for the NTC, which was recently revamped, to provide tariff protection to local manufacturers decreased by 2.24pc to Rs135m in 2016-17. In comparison, the government allocated Rs190m for running the Geneva-based World Trade Organisation’s office, an increase of 13pc over the preceding year.

The allocation for PITAD for carrying out research activities stood at Rs40.1m. However, the actual spending in the preceding year was Rs17.4m.

In contrast, the government allocated Rs96m in 2016-17 for spending on transfers, postings and grants of home leave of the officers posted in Pakistan’s missions abroad.

The government allocated Rs64.1m for the office of TDRO as against the actual spending of Rs22.3m in the previous year. The office was established in 2014 for the trading community for resolving commercial disputes between trading firms of various countries.

There are just 12 officers on its staff and no proper law for its functioning, the TDRO finds itself hamstrung. More than 300 complainants have so far approached the TRDO for resolving commercial disputes between trading firms of various countries.

The budget for the DGTO office was Rs39.6m for 2016-17 as against the actual spending of Rs26.1m in the previous year. This office was established to regulate chambers and associations across the country. Contrary to this, the government allocated Rs55.528m for running its trade office in Shanghai, Rs46.128m in Sydney, and Rs49.037m on its office in Hong Kong.

The budget of TDAP was reduced to Rs1.067bn in 2016-17 as against Rs1.285bn over the previous year, a decline of 16.9pc. Most of the TDAP budget went to salaries of the employees.

Moreover, the government spent Rs452.6 million on the commerce ministry’s secretariat in 2016-17, which was just 7.2pc of the total budget.

“It’s because of these poor incentives in the commerce ministry that no officer is willing to be posted here,” an officer of the commerce ministry said, adding that all these departments were under-staffed which was resulting in governance issues.

The commerce ministry is also spending more than a billion rupees on given free rice to the Cuban government for the last couple of years. In 2015-16, the government spent Rs1.610bn on giving free rice to the Caribbean country through the Trading Corporation of Pakistan. The government allocated Rs1.577bn under the head in 2016-17.

As a result, the export development funds allocation fell to Rs1.173bn in 2016-17 as against Rs1.281bn over the previous year, a decline of 8.4pc. The funds under this head are used for the development projects.

The ministry spent an amount of Rs900,000 in 2015-16 on running the liaison office of Afghan transit trade in Chaman. The allocation for 2016-17 was Rs1.3m.

courtesy : dawn news

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