Ministry of Commerce's explanation for a decline in exports was rejected during the recent meeting of the Economic Co-ordination Committee (ECC) of the Cabinet with Finance Minister Ishaq Dar in the chair, well-informed sources told Business Recorder. This marks the second embarrassment faced by the Ministry in one week as Prime Minister Nawaz Sharif had scrapped what he reportedly termed 'an unconvincing' Strategic Trade Policy Framework (STPF) 2015-18.
According to sources, giving the presentation to the ECC on export performance 2014-15, Secretary Commerce Shahzad Arbab stated that Pakistan's total exports during 2014-15 were $23.9 billion. He also presented a regional comparison of export performance and informed the committee that export growth of Pakistan, China, and India registered a negative trend while Bangladesh's registered an increase. He added that export of cotton and cereals from Pakistan and India showed a negative trajectory.
The data of export product mix of Pakistan and the rest of the world during 2014 in respect of textile, leather, engineering, metal and minerals and other manufacturing products was also highlighted. The major chunk of Pakistan's exports during 2014 comprised textile and garments which comprised 54% of our total exports while its share in the world export was only 4 percent. While highlighting the reasons for a decline in exports, Secretary Commerce mentioned a number of exogenous and endogenous factors.
He stated the global commodity crisis a shift in demand pattern in the leading markets, exchange rate issues, and slowdown in the economic growth of China have contributed towards the export decline. The supply side issue (energy supply and cost, outdated technology, lack of standardisation and compliances), market related issues (market concentration, constraints in regional markets, and non-tariff barriers in India and Iran), and trade facilitation issues (regulatory burden and manual customs procedures and inadequate port infrastructure) were also cited as significant factors behind the decline in Pakistan's exports.
Secretary Commerce also highlighted the reasons for a decline in exports of textile products, basmati rice, plastic materials, cement, machinery and jewellery. The committee was informed that the petroleum top Naphta had shown a significant decrease due to the fact that a number of plants had been established in the Gulf countries and petroleum top Naphta was mainly being produced there. As part of the presentation, the Secretary, Commerce also high1ighted salient features of the STPF 2015-18.
Secretary Finance, Dr Waqar Masood, who minutely observes the performance of all the economic ministries stated that the decline in export of cotton cloth was not justifiable and suggested data be further investigated to ascertain the actual consumption of cotton yam. Finance Minister concurred and directed the Ministry of Commerce to further analyse the data to ascertain the actual reasons/factors for a decline in exports. Dar also asked the Minister for Commerce, Khurram Dastgir to take up the matter with the textile industry and urge them to boost exports particularly in view of the recently announced package in the form of cheaper electricity and gas supply. Commerce Minister is at odds with his Ministry's officials on reasons for the decline in exports. He recently met with a panel of experts comprising two former Governors of State Bank of Pakistan (SBP) and sought suggestions from them to increase exports.
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