Karachi, July 24, 2024 – The Pakistan Business Council (PBC), a leading advocacy group for Pakistani businesses, has expressed reservations about the government’s ambitious export target of $65 billion to be achieved within the next three years.
In a letter addressed to the Commerce Minister, the PBC highlighted several concerns regarding the target-setting process and sought clarification on the government’s plan to support this goal.
The PBC, a strong advocate for export-led growth, acknowledges the importance of boosting exports and reducing reliance on imports. However, they believe the current target requires a more comprehensive and transparent approach.
Here are some key points raised by the PBC:
• Lack of Consultation: The PBC questioned whether exporters were consulted during the target-setting process.
• Overlooked Factors: Concerns were expressed regarding the exclusion of factors like the Federal Budget’s impact and uncompetitive energy tariffs from the target calculations.
• Benchmarking Needed: A call for a comparative analysis of export competitiveness with regional players like Bangladesh, India, and Vietnam was made, particularly considering their concessional funding and export incentives.
• Investment Considerations: The PBC inquired about the level of investment required to diversify the export basket and expand geographically, along with potential incentives for such investments.
• Target Clarity: The PBC requested clarification on whether the target represents gross or net exports, factoring in import costs associated with generating exports.
• Strategic Direction: Further clarity was sought on whether the target incorporates plans for import substitution, incentives for new exporters and markets, and an industrial policy to leverage Pakistan’s comparative advantages.
• Market Access Concerns: The PBC emphasized the need to consider renegotiating the China-Pakistan Free Trade Agreement and exploring ways to secure better market access for Pakistani exports.
• Sustainability Concerns: The letter highlighted the impact of Pakistan’s carbon footprint on export ambitions, given the reliance on fossil fuels and the EU’s border carbon tax.
• GSP Plus Continuity: The PBC expressed concern about a robust plan to meet the EU’s conditions for continued participation in the GSP Plus program.
The PBC urged the government to share the rationale behind the target and outline its support mechanisms for achieving it. They also emphasized the need for a clear understanding of the expected private sector contribution and a revised policy framework that differs significantly from past approaches.
The PBC reaffirmed its commitment to supporting the government’s export ambitions and requested closer collaboration with the private sector to develop a realistic and achievable export strategy.