EDITORIAL: It seems the Pakistan Business Council (PBC) is doing the government’s, especially the commerce ministry’s, job for it. Its five-year exports charter and import substitution plan, presented to the commerce minister earlier this month, rightly notes that “without a long-term export policy, underpinned by a well-articulated industrial policy that brings all stakeholders together under the leadership of the prime minister, Pakistan’s exports are unlikely to grow and diversify in a sustainable manner”.
Indeed, one only has to look at the last few decades of stagnant, often dwindling, export outreach as well as revenue to understand the biting truth of this statement. The Council went on to present an impressive list of possible initiatives and interventions that could help breathe fresh life into the national export policy.
It feels the need for a five-year national charter monitored by the PM himself, which makes sense. It also feels the need, rightly so, for strong linkages between export and industrial policies. And, among other textbook text book solutions to reinvigorate exports, it mentions essentials like trade diplomacy, competitive energy rates and a stable local currency.
It also made very sensible recommendations regarding import substitution; like removing duties on industrial inputs, encouraging greenfield investments, incentivising investments in plant and industry, etc. Yet, impressive and appreciated as these suggestions are, there’s hardly anything in any of them that everybody has not already known, especially everybody in every government over the last 30 or so years.
The problem is that no administration in that time has ever had the political will to push a painful yet essential reforms process through; which is a severe indictment of our leadership, especially the political elite that never tires of detailing its many sacrifices for democracy yet has nothing concrete to show as far as real progress of the country is concerned.
And it almost beggars belief that we still do not have a proper export policy at all; still preferring to export surplus production and that’s the end of it. We still have not done the basic job of surveying international markets and identifying destinations that suit our natural comparative production advantages and exploit them accordingly.
It’s very interesting that PBC highlighted the need for economic diplomacy to negotiate new market access. This is hardly rocket science. It’s what all countries have been doing since forever. Yet, sadly, the only time the Pakistani government really properly mobilised to hunt for fresh markets was when a so-called dictator was running the show.
President Musharraf personally made a point of meeting heads of state, even requesting one-on-one meetings with leaders as far away as Latin America, only to promote Pakistani exports. Our civilian leaders did not feel the need for such things, till a cash-starved PTI (Pakistan Tehrik-e-Insaf) government went looking for foreign exchange. But its focus was still more on attracting tourism – another very serious need.
The point about financing SMEs (small and medium enterprises), because banks shy away from lending to them due to higher risk, etc., is very important though. All sorts of platforms, including this space, have been urging the government to formalise SMEs for a long time. Yet this labour-intensive sector, which employs a big chunk of the population, still faces problems accessing credit with the government not worried at all.
The truth is that shaking exports is such a long-winged process that Pakistan may already have run out of time to sort it out. It involves very thorough research of markets, planning, formalising resources, completely revamping industry and also ensuring effective diplomatic outreach.
Even if the desperation of the present solvency crisis somehow brings a delayed realisation in government about shaking the export basket, it will struggle to scramble and get everything done in time. Plus, issues like energy costs and currency fluctuations – duly noted in PBC’s recommendations – that render local industry uncompetitive internationally just cannot be solved in the near term.
While there’s always sense in pursuing reforms, however late in the day, the PBC list seems more like things that we have not done, which is why we’re in such a mess, than the things that we might still be able to do.
Copyright Business Recorder, 2024