KARACHI: President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Irfan Iqbal Sheikh has noted with profound concern that Pakistan’s regional trade deficit has widened further as its imports from nine regional countries have increased by 28.84 percent; whereas, exports to the same states have increased only by 16.97 percent.
He explained that the nine countries include all the geographically contiguous countries plus those in the sub-regional periphery — China, Afghanistan, Iran, India, Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives.
Irfan Sheikh said that the country’s imports with the regional countries clocked in at $17.814 billion for the period from July 2021 to June 2022 as compared to $13.826 in FY21, which has put additional burden on the rupee and foreign exchange reserves.
He said the current situation reinforces the FPCCI’s longstanding apprehensions that although regional trade is key to accelerating country’s exports in a sustainable manner and realising its true potential, the government is still not ready to look for out-of-the-box solutions and to offer a facilitative and incentivising regional export support programme.
There are regional blocs and countries in the world whose 70-80 percent of total trade is with the regional and sub-regional countries, he added.
The FPCCI chief called for an enhanced focus on intra-regional trade through the platforms of Economic Cooperation Organisation (ECO), which has ten members, and Developing Eight (D-8), which has eight.
These alliances, he said, have some major economies and Pakistan can export products to them in many major sectors — namely, value-added textiles, sports goods, surgical equipment, rice, fruits and vegetables, construction materials, and most significantly, IT and IT-enabled Services. It is not a rocket science that tapping regional trade can enhance Pakistan’s exports by $5-10 billion within a short span of two to three years, he added.
He proposed that Pakistan actively work towards establishing efficient banking channels with regional countries for the sake of trade, establish large border markets, explore trading options in local currencies, and assess practical barter trade mechanisms.
Copyright Business Recorder, 2022