There is much to be said about the state of the pharma industry in Pakistan, and this column has done its best to highlight some of those issues in the past (Read: "DRAP: Unhealthy negligence," Published May 25, 2016; "The pharma blues," Published March 11, 2016). Today's article, however, will focus not on the usual discussion of price regulation and stunted exports, but on 'Access Programs' and their potential benefits to the country and its populace.
One of the biggest challenges facing the small and medium enterprises sector is the lack of financing available to these firms. This was also the moaning of almost all stakeholders present at the "First National SME Conference: contribution, challenges and prospects of SME sector in Pakistan" organized by SMEDA and the University of Management and Technology last week.
Pakistan's infrastructure gap ranges between $116 and $165 billion, according to World Bank estimates. This implies that 8-10 percent per annum spending on infrastructure is required for 5-7 years to move up the ladder on economic development. By contrast, the consolidated PSDP averaged at 3.4 percent of GDP in the last four years whilst the outstanding loans by banks and DFIs on infrastructure are 1.3 percent of GDP.
Wait, no one likes us anymore? Earlier this week, India took steps towards its quest to reach Central Asian markets. With Afghanistan and Iran in tow, our eastern neighbour announced investments in a number of infrastructure projects under the "Trilateral Transit Agreement" at Chabahar. Unlike India, Pakistan actually shares border with Afghanistan and Iran. But it was nowhere to be found at the party.
Urea off-take did not pick up in April either. The Jan-Apr urea off-take this year stands at a 14-year low - that for April alone is down to a seven-year low. High input prices, struggling farm economy, late rains and all that - things are not very rosy. The preliminary crop output numbers assert the notion that farmers are in real distress - not very often you see them protesting on streets.
It would be remiss to not recognize the recent relief to the ailing textile industry of Pakistan - as of March 2016, textile mills have been getting RLNG and their energy needs are being fulfilled. There was also a recent drop in the electricity tariff to Rs12.5, a source in APTMA Punjab told BR Research. Despite these measures, the recent export numbers for April 2016 do not paint a very optimistic picture. Whatever little improvement is observed is at the value-added end - and that too, on a volumetric basis.
Covering over 45 percent of the countryâ??s import bill, one cannot overlook the significance of remittances to the external account. While celebrating the remittances galore, one can also not help but notice the declining trend in share of inflows from overseas Pakistanis in the United States of America.