The case of exports

This refers to the news report ‘January exports cross $2bln mark fourth time in a row’ (Feb 2). Within the government, there is much celebration of the fact that Pakistan’s exports are rising. However, the picture of the country’s exports is not rosy. The export proceeds during the seven months – from July 2020 to January 2021 – were $14.2 billion as compared with $13.5 billion in the same period last year. It means that the country’s exports increased by around 5.5 percent. If this trend continues, the country may end the year with the export earnings of $24-25 billion. In the past, the highest level of export proceeds were $25 billion during the term of the PPP. So, the country may not be able to cross the level achieved eight or nine years ago. More importantly, the exports are being supported by huge subsidies, concessions and fiscal incentives to exporters, besides a cheaper rupee, at the cost of domestic taxpayers. Thus, the rise in export volume in dollar terms doesn’t justify the cost being borne by the population. There is also speculation of realising less dollar values from exports due to massive under invoicing by exporters.

The bottom line is that the government has miserably failed on the export front with our exports covering less than 50 percent of our imports, thereby causing a huge trade deficit and the consequent weakening of the rupee. A robust long-term sustainable export policy should be formulated instead of working on an ad hoc basis. The underperforming export sector needs to be pulled up.

Kulsoom Arif

Karachi