In the current fiscal year, Pakistan has experienced a significant drop in regional exports, which have fallen by 28.8 percent. This is due to decreased shipments to neighboring countries, mainly China. Not only that, this is also a matter of decreased imports from China and can be attributed to the government’s austerity measures, which have resulted in the closing of letters of credit for consumer goods. This trend is concerning as regional exports account for a significant portion of Pakistan’s export industry. The importance of exports is obvious to correct the crippling state of the economy and address the balance of payments crisis.
Furthermore, Pakistan’s merchandise exports have decreased for the seventh consecutive month in April, raising fears of massive layoffs in the export sector. The declining export proceeds are attributed to both internal and external factors that are leading to the closure of industrial units, particularly in the textile and clothing industries. While some factors are out of control and can be attributed to economic difficulties, the federal government’s lack of strategy and inability to prioritise effectively is also a reason behind the state of affairs.
Many industries need immediate interventions, but help for the export industry in Pakistan must be prioritised for long-term benefit. This can only occur when a conducive environment for exporters is provided. Ideally, building foreign exchange reserves can help increase exports, but this is dependent on the current IMF tranche and other economic difficulties. For the time being, a dialogue between industry leaders and the government is essential to identify the right priorities and address any issues.
Pakistan’s exports to Iran are significant, but most of the trade with Tehran is carried out through informal channels. This should be checked and reintegrated officially. Experts have also mentioned the government’s apathy towards the IT sector, which has stagnated. The need for business-friendly policies and ensuring ease of doing business, investment-friendly climate will be essential. It is true that investment at a time like this is difficult, but priorities must be established considering long-term implications. (The Nation)
