Is Pakistan in any position to increase exports?

Pakistan is going through one of the worst phases of its economic life as after the Coronavirus pandemic that badly affected the global economy and Pakistan has been
no exception, it is now afflicted by the worst flood in recent times.

The crucial exponent of Pakistani economy has been exports but this sector showed downward trend and the chances of its picking up appear remote.

The export portfolio is in a grim shape and is negatively affecting the economic conditions of the country with widespread repercussions for the hapless people of the country.

Apart from the natural climate factors Pakistani exports also suffer from lack of innovation and severe paucity of investment. The export sector is controlled by mafia-like elite that virtually dictates the official policies and successive governments usually accommodate their demands without putting any pressure on it to increase exports in real terms.

Opinion: Issues with exports of Pakistan 

In this context it is noted that the classification of exports is done by categorising them as agricultural and industrial merchandise.

The findings are that around 80.39% of total exports from Pakistan were industrial and 19.08% were agricultural products though the country is still rated as predominantly an agricultural economy.

The remaining part constituting just 0.52% of the total was related to petroleum industry. It is worthwhile to point out that since many years the distribution between agricultural and industrial products has not been significantly altered that is one of the reasons for the poor performance of the export sector.

It is also required to be noticed that Pakistan’s exquisite rice constitutes more than one-third of total exports in agriculture sector whereas 9 of the top 10 industrial products come from textile sector depicting a serious flaw in the policy planning at the highest level whose
perception is stymied to a great degree.

Furthermore, it is estimated that agricultural consumer goods form approximately 57% of total exports of goods belonging to the agricultural sector while agricultural intermediate goods and raw material account for 43% of total exports.

While looking at the contrast it is observed that industrial consumer goods constitute approximately 62% of total exports of this sector whereas industrial intermediate goods and raw material constitute 33%.

The rest is categorised as industrial capital go to the overall exports. Many economic
experts opine that this is a pitiful situation and unless immediately addressed the situation will further aggravate.

It is also noted that industrial consumer goods are exported to the developed world particularly to America and EU countries and industrial intermediate goods and raw material, mostly in the form of textile products, are usually taken by Bangladesh and China.

Bangladesh particularly is gradually growing as the market for Pakistani goods as they are well produced and are bought at competitive prices.  It is however observed that goods produced in Pakistan are mostly of low value-added consumer nature and Pakistan’s industry was unable to fine tune its act due to the paucity of energy and other factors that reduced their competitiveness in the overall global markets.

It is widely known and objected upon that Pakistan’s industrial products are mostly exported to the US, China, EU and Bangladesh thereby limiting the scope of exports portfolio. In the comparative analysis this limitation is a deeply hazardous portent for any economy and is required to be avoided at all cost.

The most attractive countries where export goods pertaining to agricultural products are sent are Afghanistan, the UAE, Kenya, Saudi Arabia and South Korea. It is estimated that more than 36% of total exports to these countries are agricultural in nature.

It is obvious since Pakistan is an agrarian economy and most of its exports pertain to agro-based products particularly in the textile and leather sectors. It is considered easier to export
agricultural merchandise to countries that are situated closer to Pakistan in distance.

It could be clearly seen that the Pakistani export sector prefers the easy way and avoids taking risks including exploring new areas and locations and venturing to add new destinations.

Pakistani exports saw their bulk going to America, UK, China, Afghanistan and Germany and it is estimated that total Pakistani exports to America stood at $3.18 billion while their volume to UK was registered at $1.47 billion.

It is observed however that Pakistani products do not qualify on merit basis and in Europe these exports are done on quota basis.

In America the competition is very tough and Pakistani exporters struggle hard to sell their products. Pakistan exports suffer from lack of access to the region mostly due to reasons strongly manipulated by forces that matter.

It surely is a long haul but it is the only method to improve the current position of exports of the country.