According to the Pakistan Economy Watch (PEW), the Board of Investment and Trade Development Authority of Pakistan have become white elephants, as exports are dwindling and investment is slowing down, but the government is in slumber to take notice of the situation and fix the responsibility. PEW chief Dr Murtaza Mughal says that foreign investment in Pakistan has downed by 58.2 percent to $709 million. In contrast, the foreign investment in Sri Lanka is $850 million, in Bangladesh $1.5 billion, in India $3.5 billion and in Ghana $4 billion. The PEW chief adds that instead of increasing, the Pakistani exports have downed by five percent to $23.8 billion in one year while Bangladesh exports have reached $35 billion mark during the same year. On another note, he says that the import bill of the country has reached $45.9 billion, showing a widening trade gap of $22.1 billion.
Dr Mughal also says that the prime minister had promised to show the door to inefficient officials, but non-performers and incompetent bureaucrats are still in authority and the situation will not improve unless few heads roll. The grim situation of the economy will discourage foreign direct investment and encourage capital flight from the country. According to the PEW, exports have not dwindled down overnight as misuse of export incentives is also responsible for the situation. The policymakers in Pakistan are obsessed by the GSP plus status granted by the European Union as the government has focused all its attention on the textile sector, ignoring the other sectors of the economy.
The organization blames the economic managers for the declining trends of exports, but the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) puts all the blame on power crisis. It links over 17 percent decline in exports during July 2015 to shortages of electricity, gas and water. The stuck-up refund claims of the exporters and the State Bank of Pakistan have aggravated the situation, causing financial crunch in the export oriented industry. According to the chamber, hundreds of industrial units in Punjab have been shut down and others are on the verge of closer. The industries in Karachi have become hostage to the water mafia which has increased cost of production. However, instead of TDAP, the chamber blames the energy crisis and water shortage for declining exports. To arrest the trend of falling exports is a test case for the government. If the government wants to increase exports, it will have to avoid indirect taxation and decrease the prices of petroleum products in the country.
