Declining exports dilemma

• Other Asian countries flourish, Pakistan falters

One of the perennial problems plaguing the country’s economy, an abysmal level of exports, casts a negative chain reaction effect on the entire system, impacting the benchmark annual GDP growth rate and export-to-GDP ratio. With annual exports languishing below six percent in the 1990s, rising to 9.9 percent in the 2000s and dipping sharply to 1.94 percent after 2010, the GDP growth figures for corresponding periods remained well below par as well, varying at 4.6 percent, 4.7 percent and 4.3 percent. The fall of export-to-GDP ratio from 15.53 percent in 1990s to current 9.13 reflects the steep decline in exports and is lowest in the region, with Iran (22.4 percent), China (19.64), India (19.17), Sri Lanka (21.44) and Bangladesh (16.64 percent). Immediately tied with vibrant export regime is international value of the domestic currency, and international financial experts always held that rupee was artificially pegged at vastly inflated levels. But a currency free-fall too has its collateral damage, causing a quantum leap in external debt, something serious when the debt burden is a staggering $89 billion, apart from the fear of fuelling politically damaging high inflation.

In sharp contrast to this dismal performance, most Asian economies are flying high based precisely on their highly competent and vigorous export-powered and oriented strategy, which then provides the vital competitive and technological edge in production to the entire economy: (total exports, China $2,097 billion in 2016, India 264.4 billion, corresponding GDP growth, 9.63 percent and 6.59 respectively). Diversifying goods, seeking new markets, creating export options and openings, focusing on manufactured value-added products, low energy cost, commitment to quality, structural reforms, sound entrepreneurship, trained labour, and concentrating on sectors with high share and bright future prospects in global trade, are their main thrusts, something Pakistani economic managers, whose sole genius lies in amnesty schemes and artificially bolstering forex reserves by mindless borrowing, desperately need to adopt. The pampered local textile industry, no doubt constitutes 67 percent of our total exports but textiles and clothing only make up 5pc of global trade, while Pakistan’s ranking in Global Competitiveness Index is a lowly 115 out of 137 countries, below India (40), Sri Lanka (65) and Bangladesh (99).