ISLAMABAD: Prime Minister Advisor on Commerce and Investment, Abdul Razak Dawood has said Pakistan is facing an anti-export bias and government devours Additional Custom Duty (ACD) and Regulatory Duty (RD). He offered these comments at a meeting of National Assembly Standing Committee on Commerce, initially presided over by Yaqoob Sheikh in the absence of Syed Naveed Qmar who was busy in two other meetings. However, later on, he joined the meeting.
"I went to FBR and asked do you refund duties to exporters, they replied in the affirmative. When I asked which duty is refunded to exporters, they said customs duty only. They do not refund ACD and RD as government swallows it," he said, adding that now refunds would go directly to exporters from the State Bank of Pakistan (SBP).
Dawood said he had asked the SBP not to release refunds to FBR, as they would 'swallow' the amount.
In reply to a question, he said Pakistan's exports were down by $ 3 billion during Covid-19. Sharing details of exports volume in recent months, he expressed the hope that in September exports would rebound as almost all exporters claim that they were fully booked.
Dawood argued that de-industrialization in the country has stopped and he would meet Governor SBP on Friday in Karachi to discuss different options to revive dysfunctional textile units as capacity in this sector has shrunk.
"We are now working on export led growth strategy and next six months would be very important in this regard," he continued.
In reply to a question, he said that export target for the FY 2019-20 was $ 23 billion and government achieved less than $ 20 billion. He did not share the export target for current fiscal year.
However, Commerce Ministry, in its presentation shared four scenarios with the committee: (i) in a pessimistic scenario with steeper decline (10 per projected) and a more prolonged and incomplete recovery in 2021;(ii) in optimistic scenario, with a drop in trade followed by a recovery starting in the 2022;(iii) in a pessimistic scenario, the suppression measures will have to stay in place for the entire year of 2020 with limited recovery in 2021( 10 per cent in bad scenario year) and ;(iv) in a less optimistic scenario, measures stay in place in 2021, leading to a U-shaped recovery.
Aslam Bothani, who belongs to Hub (Balochistan), raised the issue of hurdles to export of perishable goods to Iran through formal channels.
Shaista Pervaiz Malik raised the issue of increase in electricity by 20 per cent from Cents 7.5 to Cents 9.2 for export-oriented sectors. Malik was of the view that there should be predictability and consistency in government's business-related policies. Dawood said that five sectors have been informed that the new electricity tariff would be only uptill June 30, 2021.
During a discussion on cotton production, he said this year cotton production target would not be achieved due to a variety of reasons. including recent torrential rains and subsequent flooding.
He was also unhappy on provision of low quality seeds and pesticides which affect the production of cotton.
"I met farmers in Multan who said they are unable to get unadulterated seeds. Also they claimed that the quality of pesticides is poor. Earlier, they used four or five bottles/packs on one acre but now they use upto 20 bottles/packs," he said, adding that in Pakistan number two seeds are prepared.
He said Pakistani cotton was very good for home textiles and jeans but international markets want better cotton. The Central Asian cotton is better in quality.
He said, a study shows that Pakistan's 70 per cent exports are related to textiles and 30 per cent to synthetic but in the world 70 per cent is synthetic and only 30 per cent textile.
He said the Commerce Ministry is submitting a summary to the ECC for a reduction in duty on synthetic fibres like nylon, etc, to be considered on Wednesday (today).
Dawood also revealed before the committee that in the last ECC meeting he opposed ban on export of potato forthwith. He said, with abrupt decisions, confidence of foreign and domestic buyers is shattered.
He also disclosed that Russia is a big market of Pakistani potato, as they like Vodka made with Pakistani potato.
"If we put a ban on export of potato, we will loose a big Russian market," he said, adding that measures which hit exports should be discouraged. The chairman Standing Committee suggested that the government should launch a pilot project to convert fresh milk into dry milk so that wastage of milk is discouraged.
The meeting was attended by Shaza Fatima Khawaja, Mian Shafiq, Sajida Begum, Rana Irdat Sharif Khan, Tahira Aurangzeb and Aslam Bothani.
Copyright Business Recorder, 2020
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