A projected 10.7% growth in exports for fiscal year 2016-17 runs contrary to the government’s ambitious plan to take export earnings to $35 billion by the end of 2017-18 under the three-year Strategic Trade Policy Framework.
The $35-billion target, which was set just two months ago, needs a much more rapid rise in annual earnings and a meager 10.7% growth will not be sufficient to meet the goal, say experts. Under the annual development plan released by the federal government with the budget for 2016-17, exports in the new fiscal year are projected to rise 10.7% to $24.8 billion from an estimated $22.4 billion in 2015-16.
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Imports are forecast to grow 14.7% to $45.2 billion in the upcoming fiscal year 2016-17 compared to an estimated $39.4 billion in the outgoing year 2015-16. Consequently, the trade deficit will be $20.4 billion in 2016-17 as opposed to a projected $17 billion in 2015-16.
However, experts point out that the government wasted an entire year in framing the Strategic Trade Policy Framework 2015-18 and now it has set only a 10.7% export growth target for the second year of the framework. In this scenario, the country will find it extremely difficult to hit $35 billion in export earnings by the end of fiscal year 2017-18.
“The $35-billion export target is unlikely to be achieved by June 2018; there must be at least 30% growth each year to meet this goal,” commented an official of the Ministry of Commerce.
In the annual plan, however, the government has outlined a number of initiatives to forge regional connectivity in an effort to boost bilateral and multilateral trade with countries in the region.
The key measures include the resolution of outstanding issues in the Afghanistan-Pakistan Transit Trade Agreement and initiation of negotiations and early conclusion of the Afghanistan, Pakistan and Tajikistan Transit Trade Agreement.
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Effective implementation of the International Road Transport (TIR) convention and reactivation of the Quadrilateral Transit Trade Agreement among Pakistan, China, the Kyrgyz Republic and Kazakhstan are also in the priority list of government initiatives.
Apart from these, formulation of the Pakistan, Afghanistan and Central Asia regional economic integration framework through a regional trade office in the Ministry of Commerce is also part of the priority list. The government claims that the initiatives have been planned by taking all the stakeholders and relevant ministries on board.
For a short-term boost to exports, basmati rice, horticulture goods, meat products and jewellery will be given preference with focus on the markets of Iran, Afghanistan, China and the European Union.
To market Pakistan’s high-quality rice, the government will facilitate the import of parboiling machinery and provide incentives for branding and certification. Assistance will also be ensured for developing warehousing facilities in Iran and Saudi Arabia.
Basmati rice, kinnow and meat products can capture Iran’s market following the lifting of international sanctions from Tehran. Under a strategy, infrastructure will be developed for access to the Iranian market through the land route.
On the other hand, rice, cotton yarn, fabrics and garments could be exported to China through strategic interventions. The government will update the stakeholders on concessions under the China-Pakistan free trade agreement (FTA) and will put talks on second phase of the FTA on a fast track.
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Under the annual plan, the government will provide 50% support for the import of new plant and machinery for specified under-developed regions. Besides, it will offer 100% mark-up support on the import cost of new plant and machinery for industrial units across the country.
A matching grant up to a maximum of Rs5 million will be provided for specified plant and machinery or other specified items to encourage innovation in the small and medium enterprises and export sectors.
A common facility centre for the surgical instrument industry will also be established to push export of its products.
the writer is a staff correspondent
Courtesy : Express Tribune