The Prime Minister’s Rs180 billion export incentive package has been deemed a political move by opposition parties, and they might not be too far off the mark. Cashbacks – as announced in the export boost package – are easy to hand out and fairly popular among the business community, but lump sum transfer is often consumed rather than invested in the target sector. This is exactly why this package looks like it is engineered to elicit votes rather than actually work towards fixing the problems of Pakistani industry. Ensuring a steady power supply to textile industries – their main demand for the past few years – allowing for greater investment into the finished good industry and maybe even employing protectionist policies to support local industries might be more effective than short term gains made from cashback offers.

Pakistan’s exports have been steadily declining since the PML-N came into power – on the back of electoral promises to boost trade and economic growth no less. The economy’s performance has improved but there is gross mistrust of the Finance Ministry and the figures it puts forward. The GDP (Gross Domestic Product) is improving, but it has much to do with Chinese investment, rather than the success of Pakistani economy. In the long run it means bigger trade deficits, which means more debt repayment obligations.

A vibrant export policy is essential, but it requires much more work than erratic hand-outs. We have seen these schemes before, including the laptop drive in Punjab, which while useful for a small percentage of students, has been criticised for its lack of impact in the long run and being a sunken investment with no visible dividends, except the popularity of the PML-N among the burgeoning youth.

While incentives to spur industry are a positive step, the policy announced has to be just for that aim, rather than to get the industrial elite on a party’s side. This is hard for any party to do, to go for the greater good for which they will be congratulated in five or ten years, rather than the immediate and easy action, that will get them instant popularity. Our economic managers need to be creative enough to be able to achieve both.