Acknowledging ground reality
It appears that government is now making an objective analysis of its economic reforms agenda, the rushing of which was criticized by independent economists because of its impact on the manufacturing sector. Giving his assessment at talk on Business Way Forward under the auspices of English Speaking Pakistanis forum, Advisor on commerce, textiles and production Abdual Razzak Daud has acknowledged that stabalisation measures have not given the intended spurt to economic growth but at the same time defended these measures being inevitable for arresting further down turn of the economy and putting it back on the revival path. He contended that economy can grow on sustainable basis only when its basic fundamentals are corrected. Razzak Daud said that for realization of this goal the exiting consumption and imports dependent economy has to be changed to exporting one as export led economic growth at 7 percent or more is essential for which product quality, reliability and in novation are the essential ingredients.
Who is responsible for eroding the industrial and export base of the country and making it a trading nation? The decisions makers of the past and present are responsible for it. Over the past five decades long term industrial and trade policies had not been implemented. Consequently, the industries of imports substitutions, raw material and intermediate goods production could not be established. Currency depreciation and high import duties on industrial raw material and intermediate goods have pushed down production in the manufacturing sector. Large scale manufacturing has declined by 8percent in the past five months of current fiscal year.
It is very surprising that inspite of rich agriculture resources, Pakistan exports edible oil to meet its 75 percent consumption requirements. Palm oil accounts for 94 percent of the cooking oil import. It has now become the third largest edible oil importing country. There has been a tremendous increase in the importing country of this commodity over the past 13 years. In 2006, edible oil import bill was $615 million which rose to $3 billion in 2015 and may go up to $ 7 billion in 2020-21. The country can be self-reliant in the production of edible oil if two major hurdles are overcome. First priority must be setting up industries for edible oil extraction from oil seeds, its purification and refining the final product. Second, incentives have to be given to farmers to attract them to grow oil seed crops. No matter, how much we increase the production of oil seeds the issue of lack of purification and refining of edible oil will serve as a discouraging factor hindering boosting local production of cooking oil. The import spree and lack of incentives to farmers have compelled them to switch over to growing other cash crops. The soil and climate of interior Sindh and Baluchistan are favourable for the cultivation of ‘Jojoba’, a plant bearing fruit with 40 percent oil content. The provincial governments of these two provinces can bring arid areas under the cultivation of this plant.
The government on the one hand urges business leaders to make exports as the engine of economic growth but on the other hand takes fiscal and monetary measures to make the exports of value added products less competitive in the international market. Over the past one and half year the exports of only three primary commodities such as fish, meat and poultry has registered 54 percent increase. The business community is persistently complaining that doing business has become very difficult because of high electricity and gas tariffs, high interest rate and fuel prices. Moreover, rates of duty and taxes on the import of industrial raw material and intermediate goods are also very high. Industrial output and exports will not gain momentum unless the bottlenecks that trade bodies mentioning over and over are removed.