LAHORE     -    The Pakistan Industrial and Traders Associations Front (PIAF) former chairman Irfan Iqbal Sheikh has expressed his serious concern for not achieving export target set for the fiscal year 2018-19, which was missed by a huge margin of over $5 billion, as the current export portfolio is marred by a lack of diversification. He observed that exports have dropped by about one percent during the fiscal year ended June to $22.97 billion, falling massively short of the $28 billion target set by the government, as very few products are exported by some exporters to limited markets. He stated that a major enhancement in exports requires huge and wide structural reforms, urging the government to take business community on board, who are the real stakeholders in preparing policies to enhance exports, which is prerequisite for economic growth. The bleak trade numbers come despite government extending tax incentives to the export-oriented sectors to help increase earnings.

It is appreciable that the government was successful in meeting its imports target during the fiscal year but export proceeds during June dipped by 8.77 percent to $1.71 billion on a month-on-month basis, as the slowdown in economic growth in the EU along with spill over from US-China trade tensions led to the decline in exports. According to statistics, imports fell by 9.86 percent to $54.79 billion from $60.79 billion during the same period last year whereas on a month-on-month basis, import bill dipped by 22.8pc to $4.36b as against $5.65bn over the corresponding month last year.

Irfan Iqbal said that the policy intervention of government and State Bank of Pakistan in terms of rupee devaluation and tariff and non-tariff barriers have started yielding some positive results to slow down imports. The rupee lost against the dollar also gave an opportunity to exporters to improve their global competitiveness but they miserably failed in this regard. The government also imposed regulatory duties on hundreds of non-essential imports.

PIAF chairman Mian Nauman Kabir said that the reduction in imports of furnace oil, machinery and electric equipment, palm oil and textiles imports helped contract overall imports. The government has taken several measures including the imposition of regulatory duties on almost 1,900 tariff lines mostly luxury items and restricting imports of used cars in order to reverse the rising import bill to narrow the trade deficit which had risen to over $38b during the last fiscal year. Consequently, the country’s trade deficit during the period under review fell by 15.33 percent to $31.82 billion compared to $37.58 billion of last year, which is a welcome step.

On the other hand, the government will have to take serious efforts to jack up exports, which have shown no improvement from the previous fiscal year despite massive devaluation of the rupee and a range of subsidies and incentives offered by the government to the export-oriented sectors. PIAF chairman urged the government and policymakers to encourage private sectors to play their roles in putting the economy back on the right track. We should fully avail the opportunities created due to the worldly chain of events, such as the global decline in oil prices and the China-Pakistan Economic Corridor (CPEC).