Government fails to deliver on services export plan

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The Rs2 billion export strategy of services formed by Pakistan for the period 2009 – 2012 has not been implemented due to, what sources claim to be, paucity of funds. Despite the lack of facilities and government’s support the country’s export of services has shown a growth of 24.6 per cent during the first 10 months of the current fiscal year as compared to the corresponding period last fiscal year.
According to statistics issued by the Trade Development Authority of Pakistan (TDAP), the export of services increased to $4.662 billion in July-April period of financial year 2011 as compared to $34.740 billion recorded during the same period last fiscal year. The Rs2 billion allocated for Services Export Development in Strategic Trade Policy 2009-2012 are to be utilized in the upcoming fiscal year which is just 14 days away.
It has been two years since the funding has been approved yet nothing has been done regarding the project so far, sources said. Under the three years ‘trade policy’ the “Services Export Development Fund (SEDF) was to be established at TDAP in 2009 to promote the export of services. But, the Ministry of Commerce has yet to release the proposed Rs2 billion fund to TDAP which is the implementation agency of the program; sources said.
Due to the non-availability of funds, facilities and guidance from TDAP, sources said, the interest of stakeholders from various services sectors was tapering. The sector is important to the country because it is expected to contribute $5 billion out of the expected $24 billion export of the country this year. However, the government seems uninterested in implementing the proposed strategy. SEDF issued the following guidelines: the fund shall consist of grants made by the federal government, it shall be non-lapsable and may be maintained in an account with a scheduled bank of Pakistan.
The details of how the fund is to be utilized are in the table. Though, in the absence of the strategy, the country’s export value of services is showing growth, the export could have further increased manifolds if the strategy had implemented during the last two years, sources claimed. According to the statistics by TDAP the export of transport services was increased by 13.36 per cent in the ten months period of the current financial year, travel by 14.14 per cent; construction services by 38.69 per cent; insurance 20.89 per cent, computer 15.69 per cent, and government services 74 per cent.
Services that showed negative growth included communication services, financial services, royalties and license fee and cultural and recreational services which have faced a drop of 3.89 per cent, 42.89 per cent, 58 per cent and 16.54 per cent respectively.

The fund shall be utilised for the following purposes
1) Provide assistance in the form of reimbursable grants to Pakistan Services Exporters for tendering or negotiating for international projects
2) Aid services exporters by conducting pre-feasibility or feasibility studies for international projects
3) Assist Pakistan Services Exporters in setting up their services offices abroad in order to increase the recognition for Pakistan brand of services
4) Hold national/international conference on exports of services and recognise exemplary service exporters in awards programs
5) Maintain a database of services exporters and formulate it into a services directory with an online presence
6) Assist in setting up of comprehensive grading systems and institutions for international evaluation of services provided by Pakistani service exporters
7) Coordinate with educational institutions and universities in developing quality human resource through funded fellowships, sponsored educational events and competitions, events to increase industry-academia interactions, and through other skill and expertise development initiatives
8) Any other activity which is relevant for promotion of exports and approved by the Board