The country’s exports are rapidly declining, seven percent just in July last month, whereas the increasing volume of import is growing trade deficits day by day. Experts believe various factors are responsible for the declining exports, including questionable performance of the Trade Development Authority of Pakistan and increasing cost of production in the country besides pressures on the business community from various government agencies on one pretext or the other. At a time the rigid economies are opening up for the world investors, the Pakistani government has run amok to collect more and more taxes at the cost of the national economy. An approach to maintain balance between taxes and incentives is missing and officials are assigned unrealistic revenue targets, which increase cost of production. The domestic industry have been rendered uncompetitive due to decades old protectionist policies. According to experts, uncompetitive business should not be protected from the necessity of improving its competitive position in the market. There is no reason to protect well-established industries and it is another cause of declining exports.
According to an official of the Federation of Pakistan Chambers of Commerce and Industry, foreign currency reserves of the country are already under pressure due to falling remittances sent by the Pakistani expatriates. The other countries in the region, including India and Bangladesh, have made remarkable progress during the last two decades and have increased their exports to many fold. We are going on the back gear due to inconsistent policies. The government wants money at the cost of businesses and to some extent, it is able to realize the revenue targets, but damaged the business and industrial base. The exports have come down to $20.8 billion during the previous fiscal year as compared to $23.7 billion in 2014-15. The export sector is slipping from the hands of the government and it is not ready to take immediate steps to arrest the situation. It seems as if increasing the exports are not the government priority.
Newspaper reports suggest that exports are falling at the rate of 12.24 percent annually and there is a need to identify and remove causes of the decline. The poor performance of the export sector should be an area of concern for the government as increase in trade deficit will land the government into another loan programme with international donor agencies. The government’s export target of $35 billion for 2018 under the Strategic Trade Policy Framework 2015-18 is difficult to be achieved as the country could not even maintain the minimum export level during the last two years. The government must come up with a workable plan and set realistic export target keeping in view the situation on the ground. Otherwise, the government will get nothing but regret and disappointment at the end.
