Business

‘Trade Diversification Policy’ boost country’s exports in non-traditional markets

Written by The Frontier Post

ISLAMABAD (APP): Adviser to the Prime Minister on Commerce and Investment, Abdul Razak Dawood on Sunday said the government has fully implemented the trade diversification policy and is currently seeing an increase in Pakistan’s product and geographical exports in the global market.
The main objective of the government’s Trade Diversification Policy’ is to introduce new trade products of a country’s exports and to create new non-traditional markets at global and regional level to increase domestic exports, Abdul Razak Dawood told APP here.
For the last seventy years, Pakistan exports have depended on the traditional markets of ten countries, and local textiles have relied on only five markets, including the United States, China, European Union, the United Kingdom and Bangladesh, he said.
The adviser said that Pakistan is currently in the process of introducing new markets and new products in addition to traditional markets and traditional export products in which the present government has made great strides despite the Covid -19period.
The Ministry of Commerce has launched the ‘Look Africa campaign’ in search of new unconventional markets and did a lot of work on Central Asian markets, which has resulted in good exports.
He said that in addition, new industrial units are being set up to promote product diversification to boost domestic exports in information technology, light engineering including tractors, fisheries and electronics and mobiles.
So far, Country’s exports of non-traditional products, including information technology, have grown by 60 percent in the last four months. Razak Dawood said that the increase in the existing exports was a manifestation of good policy of the present government during Covid -19.
He said that like Association of South East Asian Nations (ASEAN), “We also need to strengthen the our regional bloc in South Asian Association fo.r Regional Cooperation (SAARC) and increase bilateral trade activities in the regional countries.”
He said that the government has reduced tariffs and duties on raw materials to zero per cent to increase the country’s exports.
These include Textile, Fiber and Jute where tariffs are discounted.
Replying to a question, he said that Pakistan exports to Central Asian Republics (CARs) countries increased to USD $ 145 million in 2020-21 from USD $ 104 million in 2019-20. For six months, from July-December 2021, these exports increased by 173 percent to USD$ 134 million from USD 49 million during the same period last year, he said.
The Ministry of Commerce’s ‘Silk Route Reconnect’ initiative is now bearing results, he added.
To increase the trilateral trade Volume with CARs, the Adviser said that the Pakistan-Uzbekistan Transit Trade Agreement was signed in 2021 at Tashkent and both the countries discussed opening banks in each other’s country.
“We are negotiating Preferential Trade Agreements (PTAs) with Afghanistan, Azerbaijan and Uzbekistan”, adding, transit trade agreements were also being negotiated.
The advisor said that for truck movement, their negotiations were at an advanced stage.
Replying to another question on Information Technology exports, he said that there is a lot of scope to increase exports in Information Technology (IT) from non-traditional sectors at present.
The current annual $ 2.5 billion IT exports are very low, “We now have an annual export target of $ 4 billion this year, he said.
Razak Dawood said that there was a need to promote export culture in the country at present and the government wanted to increase exports on priority basis.
The adviser said that Pakistan’s economy has made significant progress reflecting a blend of stabilization and structural reforms despite being challenged at the economic and geo political front and is moving on a positive growth trajectory.
He added that Micro Small and Medium Enterprises (MSMEs), that use e-Commerce platforms, are around five times more likely to export than those in the traditional economy and the policy aims to pave the way for holistic growth of e-Commerce in the country by creating an enabling environment in which enterprises have equal opportunity to grow steadily.
He stressed that the way forward for Pakistan on the economic front is to focus on exports, specifically IT related exports.
While informing about the current export situation, he said that because of prudent economic and trade policy of the government, Pakistan export target of USD $15.125 was achieved in the first half of FY 2021-22 from July-December.
From July-December 2021, Pakistan exports were USD$ 15.125 billion and the target for the first half of the current FY, were USD$ 15 billion, said.
Razak Dawood said that Pakistan’s exports during December 2021 increased by 16.7 percent to USD$ 2.761 billion as compared to USD$ 2.366 billion in December 2020, showing an increase of almost USD $400 million.
He was informed that the export target for the month was USD$ 2.8 billion.
The adviser said that there were indications that the growth in imports has started to decline.
During December 2021, Pakistan’s imports decreased by USD$ 1 billion to USD$ 6.9 billion as compared to USD$ 7.9 billion in November 2021.
Razak Dawood said that during the first half of the current Financial Year (FY), exports during July-December 2021 increased by 25 percent to USD$15.125 billion as compared to USD$ 12.110 billion during the corresponding period last year.
He said that the exports of Fish and Fish Products, Plastics, Cement, Fruits and Vegetables, Petroleum products, Natural steatite, etc increased in the last six months. In terms of market diversification, there was an increase in exports to Bangladesh, Thailand, Sri Lanka, Malaysia, Kazakhstan, South Korea, he informed.
He said that for traditional sectors, there was an increase in the exports of Men’s Garments, Home Textiles, Rice, Women’s Garments, Jerseys and Cardigans and T-shirts.
The adviser said that in terms of traditional markets, as compared to December 2020, Pakistan’s exports to United States, China, the Netherlands and Spain increased in December 2021, while exports to the United Kingdom, Germany, Afghanistan, Saudi Arabia, Russian Federation, Indonesia and Czech Republic decreased.

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