Trade targets are a matter of simple statistics. Look at the present year figure, calculate the average growth rate in the last few years and add on that rate to the base year and set the target. According to this simplistic exercise Pakistan should be aiming for $26 billion for the year 2011-2012. The prime minister has approved this figure and made mumbling reference to some run of the mill suggestions of promoting regional trade and activating our ambassadors in these countries to enhance trade diplomacy. The lack of innovativeness in the recommendations again shows the lack of direction and commitment at the highest level to invigorate trade at a time where conditions at home and abroad could not be worse.
Exports are the backbone of any economy. If we see the history of all the countries that are rising and dominating the world today one of the common factor underlying that rise is the aggressive export policy followed by these countries. Japan’s auto exports were the basis of its economy becoming one of the largest in the world. China and Korean development was a product of their export miracles, with China going with the scale and low cost strategy and Korea for electronics that have beaten the best world over. However these countries have put exports in the center of their economic and political strategy; Their export framework is made with total collaboration of the business community where the suggestions of the traders and entrepreneurs form the basis of any policy formation. However, in Pakistan the situation is opposite with the government and the business community at loggerheads. The business community is constantly complaining of the lack of sensitivity of the government to their issues and this lack of support has actually destroyed many small and big scale exporters who are suffering from price hikes and energy strikes.
The exporter in Pakistan suffers from a number of ills. The first one is the lack of governance in the country due to terrorism and lawlessness. Secondly, from export policies that are random and purposeless. The prime minister has talked about promoting regional trade and on paper efforts are being made to promote FTAs with Sri Lanka and India etc but the truth of the matter is that even when trade barriers are reduced in these countries non trade barriers are used to make trade as unfree as possible. Many of our products like cement have suffered heavily due to the documentation and testing requirement of the Indian custom authorities that has made them costly and in competitive. The government so far has no clue how to deal with the non-tariff barriers as they are unable to understand and cope with the legal and intellectual knowledge required to make a convincing case for market access.
The government’s suggestion of activating foreign offices is a proposal that is put forward by the business community that has been frustrated by the complete lack of support from Pakistan’s trade mission’s abroad. The prime minister is planning a conference for all ambassadors to make them more responsive to trade needs. However the problem is that all these postings are political appointees who may have no idea of how to promote products and services in a way that the country benefits. Having a conference will just be another visit back home for these people without any impact on their performance and output.
What is needed is a restructuring of the trade missions abroad. Even if the ambassadors are people who are the government’s own henchmen, they need to create a special cell for international marketing in the prospective countries they are planning to target. This cell should be manned by professional people who have expertise in conducting market research studies to identify the market potential for our products and share it with the relevant industrial associations in Pakistan. These studies should then be circulated amongst relevant exporters who should then contact the cell for making further enquiries to specific customers. The cell should thus have the capacity to develop information, connect the Pakistani exporter to the market and enable them on any political and legal information they would need to facilitate their trade transaction. Each cell should be given a specific trade achievement target per country and should be evaluated on their performance rigorously. Only with this professional approach the foreign offices will become productive and viable other wise like any other government office they will remain an all expense paid vacation for government’s blue eyed boys.
The government must give special emphasis to not only regional trade but trade with ignored markets like Africa and Latin America. The Indian government has made huge inroads in markets like Sudan and South Africa and it is time that government facilitated special exhibitions and delegations to explore the potential of African markets to allow the exporter to have an alternative to the decreasing demands faced in Europe and America. Similarly Brazil, that is already a BRIC country cannot be ignored any longer. Pakistani products like cotton, rice, leather, mangoes, etc, have the best quality in the world and to realise their potential the focus should be on professional marketing skills of market research, branding and client relationship. With a concerted effort to find new markets and enhance the perceived value of our products through branding and promotion the export target can be doubled to $50 billion by the year 2015.
The writer is ananalyst, consultant and CEO of FranklinCoveyPakistan and can be reached at [email protected]
