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EXPORT PROMOTION MEASURES PAKISTAN
Export Promotion Measures
Since independence in 1947, Pakistan has been facing a peculiar situation of slow growth in respect of its exports. The exports have increased at an annual growth rate of 5.6% whereas some other developing countries in Asia like Korea, Taiwan, China, Malaysia has succeeded in increasing their exports manifold and reducing poverty at rapid speed. The Government of Pakistan is quite aware of this situation and has taken concrete measures to boost external trade in the country. The exports have grown by about 112% from $7.8 billion in 1998-99 to $16.5 billion in 2005-06. The exports further went up to $17.1 billion in 2006-07. It is projected at $19.2 billion in 2007-08.
Main elements in export development:
Pakistan's exports base is extremely narrow. About 63% of its exports earning are contributed by the cotton group alone. The other three items namely leather, synthetic made ups and rice contribute about 15% of total exports. Unfortunately the above four items are relatively low value added product. Pakistan has not made much progress in increasing the number of products. Pakistan is also yet to enter in hi-tech exports. In short, Pakistan is lagging in product diversification, value addition diversification, hi-tech industries to face the fierce global competition, faced with lower % share of industry in GDP, the Government of Pakistan is taking the following measures for export promotion.
Steps for Export Promotion:
- Diversification of product and market: At present our exports are highly concentrated in five products namely cotton, leather, rice, synthetic, textiles and exports which account for 78% of our exports. These items are generally of low quality and low priced in the international market compared to other competitive countries. Pakistan is gradually moving towards not only higher value added products in export of textile manufactures but have added ten more sectors like engineering goods, marble and granite, fisheries, IT and finance and accounting services etc., for increasing earning in exports. In addition to diversification of products, new markets for the Pakistan's goods are also being explored in African countries, South America, Russia Eastern Europe etc.
- Value added in exports: Pakistan's share in international trade is merely 0.12 percent. For increasing exports, it necessary that it should move towards higher value added in exports. Pakistan is importing new machinery for quality improvements in textile manufactures, leather jackets, and other products so that its exports should grow.
- Cluster development: If there is a concentration of small and medium enterprises producing related goods, it helps the industries in complementing each other resources and exports. The Government of Pakistan is providing loan and building infrastructure to develop light engineering industry to Gujranwala and Gujrat, cutlery industry of Wazirabad and Sports industry of Sialkot, marble industry of Karachi. If the businesses succeed in improving the quality and quantity of their produce, it will help in increasing the volume of exports.
- Brand development: The Export Promotion Bureau (EPB) now called Trade Development Authority of Pakistan (TDAP) is persuading the exporters of textiles, leather garments, rice, sports goods to develop their own brands and labels for their products. The highest level of value addition occurs when products are sold under a brand name.
- Setting export processing zones: The Government is establishing new export processing zones in Sialkot, Gawadar, Quetta and Multan for facilitating businesses to export goods.
- Appointment of trade commissioners. The appointment of trade commissioners is also helping in promoting country's image and securing orders for exports.
- Improvement in physical and financial infrastructure: The Government is investing heavily in the improvement of physical and financial structure including shipment, clearance, cargo space, handling at the parts and airports for smooth flow of export and import of goods.
- Package of game and Jewellery sector: In order to increase exports of gems and Jewellery, it has been declared as an industry. The sector has now easy access to credit and avails of the advantages in utility rates and taxes. The reduction in cost of production will make these goods competitive in the international market and help in promoting trade.
- Refund of sales tax: The procedure for refund of sales tax has been simplified. It will help the exporters to free up time and focus on marketing of goods in the international market.
- Improving Skill development: For increasing exports, stress is now being laid on increasing labour productivity through education, on the Job training, skill up gradation and importing new knowledge and latest techniques. This will help the businesses to produce higher value added goods at low labour unit cost.
- WTO obligations: Pakistan is one of the founding members of World Trade Organization (WTO). It is fully abiding by WTO rules of non-discrimination among various members in their tariff regimes and other rules and regulations. It is hoped that Pakistan will get a larger share of its products in the international market. Pakistan needs to meet challenges and avail opportunities in all sub-sectors.
- New era of exports: Pakistan is now preparing itself rapidly for the new era of exports where hi-tech and information technology (IT) has major role to play.
- Establishing Trade Development Authority (TDAP): The Government has established TDAP for rapid trade promotions in the fast changing international trading environment. This TDAP has replaced Export Promotion Bureau (EPB) establisher in 1953. The TDAP is equipped with the necessary resources and autonomy for effectively taking decisions to increase exports.
- Export of horticulture products: For increasing export of perishable horticulture products, the setting up cool chains and cold storages is being encouraged in the country.
- Warehouse city: A modern warehouse house city in Karachi is being set up with public private partnership and run by professional management.
- Support for footwear sector: Our leather and footwear sector has significant export potential. The Government has allowed research and development support to this sector.
- Neglected regions: Focus on trade is now on neglected regions of the world.