ISLAMABAD: The Islamabad Chamber of Commerce and Industry has shown great concerns over an all-time high trade deficit that has reached US$ 30 billion in the first 11 months of the current fiscal year as it would cause serious external balance payments problems and would create additional problems for the struggling economy.
Khalid Iqbal Malik, President, Islamabad Chamber of Commerce and Industry said that Pakistan’s trade deficit was around $20 billion when the current government came into power in 2013 and business community was expecting that the government would take strong measures to promote exports for reducing trade deficit. However, during the period from 2013 to 2017, trade deficit has increased by almost 50% which showed that the policies of the current government have failed to promote exports up to the real potential of the country.
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He said that under the 3-year Strategic Trade Policy Framework, the government had set an annual export target of $35 billion by 2018, but in the 11 months of the current fiscal year, export have fallen to $18.54 billion from $19.14 billion during the same period of previous year while imports were on the rise which should be a cause of concerns for the policymakers.
He said exports were falling despite government’s claims of providing round-the-clock power supply to the industry. He said that government was also providing Rs.3 per unit concession in electricity tariff to export-oriented industries since 2016, but all these concessions have failed to arrest the falling trends of exports. He said to boost exports, the Prime Minister had announced a subsidy package of Rs180 billion for textile, clothing, sports, surgical, leather and carpet sectors. However, the impact of this package on exports was yet to be seen.
Khalid Iqbal Malik said that Pakistan was heavily depending on textiles industry for exports while the share of textiles was on the decline in the global export market. He urged that government should reconsider its export policy and make a new strategy to promote exports of engineering goods and value added IT products that would give significant boost to our exports and reduce trade deficit.
He said the main reason of falling exports was that the government has not addressed the challenges hurting the export-oriented industries as no effective measures were taken in the budget 2017-18 for industrial progress, increase in exports, reduction in the cost of production and enhancing the competitiveness of Pakistani goods in the international market.
He said that under the STPF 2015-18, the government had notified five cash support schemes to improve product design, encourage innovation, facilitate branding and certification, upgrade technology for new machinery and plants, provide cash support for plant and machinery for agro-processing and give duty drawbacks on local taxes. He stressed it was high time that government should fully honour its commitments with exporters to turn around the dwindling exports and decrease rising trade deficit.
