In search for an export-led growth strategy: a piloting attempt—II

The third block of this piloting exercise is the fiscal block and draws its inspiration from the above document plus PC’s document “Framework for Economic Growth” (FEG, 2011). Both the documents with little variation suggest a public development model.

The former document states, “let the ministries manage their development based upon agreed outcomes and Planning would monitor performance to green light release of funds from the finance ministry”.

How to operationalize the budget and pilot of the above three ministries? Let’s briefly take the case of MOC and MOI&P. For, FY 25-26, the Federal budgeted development expenditure for MOI&P is just 0.30 percent (1.904 billion) of Federal PSDP (663billion excluding state enterprises).

READ MORE: In search for an export-led growth strategy: a piloting attempt—I

Out of 12 projects, 9-10 relate to building (brick & mortar) of industry/product specific skill training centers. Historically, Rs 5 billion was budgeted for development to MOC in FY24-25 and was revised downward in the same year to 2.13 billion. It is doubtful whether the budgeted downward figure of 1.904 billion for FY25-26 will be spent to complete them and commence training. If export target is a priority for MOI&P, ideally these skill training centers should be in operation by the end of 2026.

Development expenditure of MOC is also revealing. It was budgeted Rs 2.2 billion in FY24-25 mainly for building an expo center in Quetta (again a brick-and-mortar project). For FY25-26 it has been allocated only Rs.50 million for development.

Stylistically, the public development model would work something like this: As economy’s growth is led by export’s growth and these 3 ministries are responsible, 2-3 percent of PSDP funds each year should be allocated in-block to them under development head, and PAO of each of the 3 ministries be responsible in devising projects that have a direct impact on achieving the target within a 3 year time frame. In this case the outcome is the export target given to them jointly or individually.

Some broad parameters for in-block funds can also be devised. As physical infrastructure projects and their impact is long-term only 15-20 percent of PSDP funds be allocated for such projects (including the approved projects). Another 40 percent on short-term projects which can be completed within 2 years and have a direct and immediate impact on meeting the given export target in the final year.

The remaining 40 percent be on 3-year contractual capacity enhancement of ministries, which means hiring of M&E, managerial, trade and industry technical and Data specialists. Within this broad allocation powers be given to the Planning commission/MOF to shuffle the development funds between the three ministries depending on their demand and impact as evaluated by the Planning Commission on achieving the 3-year target.

The fourth block is the most difficult, as it is data driven and specifically focuses on product and location diversification. At the ministerial level, the export envelope of 7000-9000 export items at the 6-8 digit level be divided among the 2 ministries: MOI&P and MNFSR.

The list of 20 products under ‘Export Emergency Plan’ is very broad and traditional. To achieve product and location diversification as well specialization, 6-8 digit level products within these 20 product lines and remaining lines be identified as low-hanging fruit. One has also to identify the existing import and export markets of competitors from the international trade data. Should one assign this huge data-driven exercise to MOC, including real time monitoring of exports or to the 2 respective ministries.

Since the two ministries hands will full on implementing the field level technical side of introducing innovation and productivity enhancing instruments and strengthening the SME sector, it makes sense for the MOC to handle the data side to inform decision making of the other two ministries.

It is also possible to reduce the size of the export envelope by adopting a ‘diagnostic’ search approach. Classify the existing export products at 6-8 digits level into 3 groups, i) Threatened ii) Emerging and iii) Competitive, on a real time basis. Leaving out the competitive and threatened groups, the ‘emerging’ products are the low-hanging fruit and most likely to contribute to time-bound export target through small investments, technological innovation and availability of skills through short term training. Within the selected envelope, the second step is to align the products with 3 types of ‘niches’. These are the products that possess ‘endowment’ and/or ‘location’ and/or ‘dynamic’ niche.

Lastly, ending on a pessimistic note with few lines. Suppose the three-year time-bound export performance falls short of the targets? Will the political system have the courage to start and implement the accountability process, or it will be buried under political, bureaucratic, judicial and organizational exigencies? Most likely it will be buried and as is the case with every political government, the buck for the failure will be passed on to the non-select ministries and extraneous factors. Some smart PAOs who smell a failure in the second year may succeed in a transfer to another ministry.

(Concluded)

Copyright Business Recorder, 2026