Government urged to devise effective export promotion policy

20 Aug, 2019

The PTI-led government is yet to come up with an effective export promotion policy given the continued sluggish export growth during the last one year. The representatives of different manufacturers and exporter associations told Business Recorder that Pakistan exports would have increased to $26 billion instead of remaining stagnant at $23 billion if export-friendly policies were introduced during the last one year.
They further challenged the government claims of giving incentives to the industrial sector maintaining that the substantial increase in their input costs would result in a further decline in exports.
The government has acknowledged that overall textile exports were $13.29 billion during July-June 2018-19 - a -1.42 percent in comparison to the comparable period in the year before.
Pakistan's exports netted around $23 billion last year while the trade balance improved by 19 percent due mainly to lower imports as the rupee depreciated against the dollar; the trade deficit declined from $37.6 billion to $30.6 billion.
Notwithstanding industry claims, the government announced rationalization of gas price at Rs 600/mmbtu for export oriented sectors against Rs 1600mmbtu; RLNG price for export oriented zero-rated sectors was reduced to $6.5/mmbtu from 10 to 12/ mmbtu and electricity at US cents 7.5/kwh for export oriented zero-rated sectors whereas previously it was Rs 12 Kwh. Talking to Business Recorder Muhammad Zubair Motiwala, Chairman Council of All Pakistan Textile Associations said that the government has withdrawn all these incentives, adding that recently gas prices for industry was increased by 31 percent, water rates by 29 percent while subsidy on electricity has been withdrawn.
A 17 percent GST has been imposed on the export sector, alleged Motiwala, adding that all these measures would result in high input cost and would render the exports sector uncompetitive in the international market. The country's exports would witness a sharp decline in coming months, he predicted.
Chairman Pakistan Readymade Garments and Manufacturers and Exporters Association (PRGMA) Ijaz Kokar said that the incumbent government has yet to come up with an aggressive marketing plan which would fuel export growth. The government has recalled around 37 commercial counselors and most of the positions are vacant, resultantly exporters are facing hardships, he added.
He further said that refund claims of around Rs 250 billion are still stuck and the government has not yet devised any viable mechanism for early releases which is resulting in liquidity crunch for export-oriented sectors. Kokar said that the government has withdrawn zero-rating facility for the five-export sectors which would result in further decline in exports in the coming months. The government is facing geopolitical and economic challenges and has yet to take measures to deal with the crisis, he added.

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