LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has urged the government to overcome trade imbalance which has become one of the biggest challenges being experienced by the economy since long.
In a statement issued here Saturday, LCCI President Sheikh Muhammad Arshad said “the LCCI understands that the economic situation has improved a lot when compared to yester years but we need to take extra measures to expedite growth.”
He said that a few events took place at global level in favor of developing countries including Pakistan like tremendous cut in oil prices but country’s trade deficit worsened during the current financial year.
He said that it is a matter of concern that Pakistan has been running consistent trade imbalance from last over a decade. He said that China has emerged as Pakistan’s biggest trading partner. He said that during the last couple of years, Pakistan has witnessed huge trade deficit with China, India, United Arab Emirates, Saudi Arabia and Malaysia while recorded trade surplus with only a few countries like United States, United Kingdom, Afghanistan and Germany.
The LCCI President said that trade deficit always pressurizes the economy and forces the country to depend on borrowing which ultimately give birth to various economic worries.
He said that it is not only a concerning but a surprising matter that Pakistan’s exports have always remained below the par despite having all sorts of mineral and human resources. He said that though a number of factors, including high input cost, energy shortage and undue delay in refund of claims, have played role in this regard but most important one is depend on a few products and few markets for exports.
Sheikh Muhammad Arshad said that Pakistan’s most favorite export markets have been Europe, North America and Gulf. He said that the exporters need to look for new markets in Central Asia, Africa and Indonesia. He said that the Central Asian Republics have on the whole over $ 65 billion imports whereas Pakistan’s exports are negligible.
He said that trade within the region is being governed by multilateral treaty such as SAFTA. It is advisable to use bilateral mechanism for trade such as FTAs with most of the countries. India for instance has reached billion dollar export figure to Pakistan under SAFTA, whereas Pakistani exports have faced non-tariff barriers since the very inception of the trade. He said that only a bilateral agreement can control such issues more effectively.
He said that Pakistan should particularly sign Free Trade Agreements with Central Asian Republics and the countries in Gulf and also in South such as Indonesia and Malaysia.
He said that Pakistani exports have suffered due to the high input cost and unstable supply of energy together with mind boggling tax regime. He said that exports would grow rapidly once these issues are tackled.
