The government is considering launching another Strategic Trade Policy Framework to push exports to $36 billion in the next five years. Earlier, the Strategic Trade Policy Framework launched by the PML-N government ended in failure as it could not even maintain the export volume of $25 billion which was achieved during the PPP government. Now the government is involving business community in the process of planning, but it is yet to be seen how much the Ministry of Commerce has the will and resources to implement incentives it is going to offer in the trade policies. Unfortunately, the previous three-year strategic framework policy could not come close to meeting the set targets because of failures at the implementation stage. In the absence of practical steps and solid mechanism, the situation on the ground will hardly change and the new framework could be another failure in the government’s cap. Mere a wish to push exports to $36 billion or beyond without changing the priorities will not bring any positive results. The government will have to relax rules for doing business, give tax and duty concessions to lower the cost of production and overhaul the industry to improve export competitiveness.
So far, the export volume has declined by 16 percent from the peak of $25 billion reached in fiscal year 2011-12 to $20.4 billion in 2016-17. The proposed export target of $36 billion would not be achieved until basic and structural changes are made in the manufacturing sector and increase country’s share in regional as well as global trade. The exports are showing moderate growth of over 10 percent since the start of the current fiscal year, but the industry has the potential to achieve higher growth. The government has recently imposed regulatory duty on non-essential items, but those also included raw material for exportable items. When the officials will work blindly, this kind of follies would not remain uncommon. The industrial sector needs to be encouraged by offering tax concessions to local and foreign investors. However, the focus of exports should not be food items, but value added goods as Pakistan has already been placed in the list of countries facing food insecurity. The successive governments have signed free trade agreements which allowed free flow of foreign goods into the country at the cost of local industry. However, it is hoped the government will try to keep consistency in the new strategic framework.
