ISLAMABAD -  Opposition parties and business community have expressed concern over the widening of trade deficit that has surged to $30 billion during the 11 months of the ongoing financial year due to massive increase in imports and decline in exports.

Pakistan’s trade deficit has recorded at historic level of $30 billion during the 11 months (July-May) of the current fiscal year as against $21.11 billion of the same period of the previous year showing an increase of 42.12 percent.

Opposition parties, including Pakistan People’s Party and Pakistan Tehreek-I-Insaf, have asked the government to revisit its trade policy to control the trade deficit. Similarly, the Islamabad Chamber of Commerce and Industry has said that policies of the incumbent government have failed to enhance the exports and control trade deficit.

“Finance Minister Ishaq Dar’s economic strategy is not working. It is sinking the country into a dangerous external debt trade. He must revisit his policies,” PTI MNA Asad Umar said in his tweet. He asked the government to reduce cost of doing business, stop delaying export refunds to hide the deficit and rely on export industry to generate resources, he added.

Similarly, PPP Senator Saleem Mandviwalla expressed great concern over the rising trade deficit of the country, which has gone up to an all-time high of over $30 billion. He termed it a dangerous trend, saying it would create serious balance of payment problems, push the country towards heavy borrowing and further difficulties.

Mandviwalla said Pakistan was going to touch a default point very soon; it would not be able to repay its external debt which has crossed $73 billion. Just a week ago Pakistan repaid a loan of $1 billion by obtaining another loan from China. “If this situation continues, Pakistan will go again to IMF for another loan,” he added.

“Unfortunately, in the recent budget, the PML-N government has not given any plan to control the widening trade deficit of the country,” he said and added the commerce ministry had no role in the three-year-trade policy, which was being run by the finance ministry.

The PPP senator said, “Pakistan, with declining foreign remittances and increasing burden of local and foreign debt and liabilities, is entering the red zone of the financial crisis. Declining exports and foreign direct investment (FDI) constitute an ugly add-on to the looming danger”.

Mandviwalla was of the view that both the government and exporters needed to move out of a mindset of short-term concessions and try to work out a sustainable strategic export plan.

Similarly, the Islamabad Chamber of Commerce and Industry expressed great concern over an all-time-high trade deficit that has reached US$ 30 billion in the first 11 months of the current fiscal year, which would create serious problem of external balance of payments for the struggling economy.

Khalid Iqbal Malik, president, Islamabad Chamber of Commerce and Industry, said Pakistan’s trade deficit was around $20 billion when the current government came into power in 2013 and business community was expecting that the government would take strong measures to promote exports for reducing the trade deficit. However, during the period from 2013 to 2017, trade deficit had increased by almost 50 percent, showing failure of policies of the current government to promote exports up to the real potential of the country.

He said under the three-year strategic trade policy framework, the government had set an annual export target of $35 billion by 2018, but in the 11 months of the current fiscal year, exports had fallen to $18.54 billion from $19.14 billion during the same period of the previous year while imports were on the rise, which should be a cause of concern for the policymakers.

He said exports were falling despite the government’s claims of providing round-the-clock power supply to the industry. He affirmed the government had also been providing Rs 3 per unit concession in electricity tariff to export-oriented industries since 2016, but all these concessions had failed to arrest the falling trends of exports. He recalled the prime minister had announced a subsidy package of Rs 180 billion for textile, clothing, sports, surgical, leather and carpet sectors to boost exports. However, the impact of this package on exports had yet to be seen.

Khalid Iqbal Malik said Pakistan was heavily depending on textile industry for exports while the share of textile was on the decline in the global export market. He urged the government to reconsider its export policy and make a new strategy to promote exports of engineering goods and value-added IT products that would give significant boost to our exports and reduce trade deficit.

He said the main reason of the falling exports was the government had not addressed the challenges hurting the export-oriented industries as no effective measures were taken in the budget 2017-18 for industrial progress, increase in exports and decrease in the cost of production to enhance the competitiveness of Pakistani goods in the international market.

He said under the STPF 2015-18, the government had notified five cash support schemes to improve product design, encourage innovation, facilitate branding and certification, upgrade technology for new machinery and plants, provide cash support for plant and machinery for agro-processing and give duty drawbacks on local taxes. He stressed it was high time for the government to fully honour its commitments towards exporters to turn around the dwindling exports and decrease the rising trade deficit.