Islamabad: Pakistan’s export of merchandise fell short of target by over $2.8 billion in the outgoing fiscal year. It was the third consecutive year in which the ruling PML-N failed to achieve the export target.
The government had projected an export target of $27bn for 2014-15, but actual export proceeds stood at $24.2bn.
Overall exports witnessed a negative growth of 3.5 per cent in the outgoing fiscal year as compared to previous year’s export proceeds of $25.1bn. Export target for 2013-14 was projected at $26.9bn which was missed by over $1.8bn.
Similarly, export target was missed by almost similar amount and actual proceeds stood at $24.8bn in 2012-13.
One of the major factors of decline in exports is concentration of exports in textile and clothing which constitute as much as 50pc. Exporters blame the ministry of textile industry for its failure to guide the industry.
An official report linked drop in exports to decline in commodity prices, particularly cotton and rice. The report says that textile exports are largely flat, mainly due to high cost of doing business, but Pakistani exports earnings could have been much higher had there been a tilt towards value-added products. The fact that towels and knitwear exports are up supports this view.
The fluctuations in export earnings are generally attributed to decline in demand and falling international market prices, erratic energy supply and rising input cost.
According to an official, there are governance issues within the commerce ministry as many competent officers were sent to other ministries.
There are some administrative issues as well which also need to be addressed. The Trade Development Authority of Pakistan is mandated to evolve marketing strategies, but consultants appointed on political grounds are not delivering. Most of the funds meant for export promotion are being used on foreign trips by bureaucrats.
While the government has created 50 posts for commercial attachés in diplomatic missions to promote marketing of Pakistani products, there is no benchmark to check their performance.
As per Annual Plan 2015-16, exports were targeted to grow by 5.8 per cent to reach to $27bn in 2014-15.
The target was set on account of momentum building in exports due to GSP-Plus status, underlying assumption of improvement in energy situation and increase in trade with regional partners, etc.
The GSP-Plus scheme is effective from Jan 1, 2014.
With over $19bn in textile exports, Bangladesh has already gone too far by investing in quality readymade garments.
After China, Bangladesh is the second biggest textile exporter as it has doubled its exports during the last 10 years, leaving both its traditional competitors Pakistan and India behind.
No doubt, export volume has increased over the past few years, but it has remained focused on few items, namely cotton and cotton manufactures, leather, rice, chemicals and pharma products and sports goods. These five categories account for about 64pc of the country’s total exports for the past many years.
Although Pakistan trades with a large number of countries, its exports nevertheless are highly concentrated in few countries.
About 60pc of Pakistan’s export destinations are to 10 countries, namely, US, China, UAE, Afghanistan, UK, Germany, France, Bangladesh, Italy and Spain.
Further, among these countries, the maximum export earnings come from US (15pc) and European countries (20pc) making up approximately one-third of the total. China with its share (9pc) in total exports has become our regional trading partner.
The share of export to Afghanistan in total exports, however, witnessed a decline in recent years from 10pc in 2011-12 to 8pc during this year.
The share of exports to EU countries, like France, Italy, Spain remained relatively stagnant.
