First, the boosting of exports requires diversification of export products, market research and access, and the promotion of trade. We should focus on exporting a wider range of products to reduce our overwhelming dependency on a few commodities. Efforts must be made to add value and improve the quality of our products making them more competitive in the global market. Potential export markets need to be explored and an investment in market research is a must to understand consumer preferences and demands. This will help tailor our local products to meet the demand of international market.
An active participation in international trade fairs, seminars, and exhibitions showcasing Pakistani products to global buyers and ensuring the quality of products will help in trade promotion. Such participation should be done in a serious manner. Necessary due diligence including appreciation of stakeholders’ views is a condition precedent to the effectiveness of such participation. Modern technology must be used to save time and money. Offering competitive export financing schemes and incentives will encourage exporters to expand the chain of products and explore new markets.
We should encourage the domestic production of goods that are currently being heavily imported. The incentives such as tax breaks, subsidies, and streamlined regulatory processes would help both in local production as well as the gradual advent of import substitution, reducing Pakistan’s heavy import bill.
Second, the reduction of imports depends on the promotion of local production, import substitution, and energy sector investment. We should encourage the domestic production of goods that are currently being heavily imported. The incentives such as tax breaks, subsidies, and streamlined regulatory processes would help both in local production as well as the gradual advent of import substitution, reducing Pakistan’s heavy import bill. The energy sector investment aiming to reduce the crippling dependence on imported energy resources and control costs for domestic industries, would ensure locally produced products are competitively priced.
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Third, an investment in specific industries and sectors such as information technology (IT) and software development can foster a skilled IT workforce to increase software exports, cater to international clients as well as facilitate home-grown start-ups that are heavily reliant on dependable IT infrastructure. Pakistan can indeed consider implementing an IT emergency or special measures to boost exports and promote the IT industry – young boys and girls with even basic education and English language skills can be groomed to earn valuable foreign exchange.
Likewise, creating an enabling policy, legal and regulatory environment pertaining to miming and minerals will help to tap the so called $6 trillion potential in this sector alone. It is hoped that the powers that be will continue the momentum generated via the recent Minerals Summit held at Islamabad wherein several potential international investors and industry professionals participated.
Enhancing value addition in the export sector and promoting sustainable and eco-friendly practices will support to maintain and enhance competitiveness in the global market. An investment in modern agricultural techniques and food processing industries shall help to acquire a fair share in international markets for our agricultural products.
Fourth, promoting the development of industrial clusters will attract investment, foster a skilled workforce, and create local employment. Focus on vocational training programs shall equip the workforce with the necessary skills required globally.
Fifth, conducting bilateral trade with certain countries in either PKR or another local currency can reduce the exchange rate risk and transaction costs. Several countries including India have been exploring international trade in local currencies. We must also explore all avenues to use its own currency or other brotherly countries’ currencies to do international trade.
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Barter trade is best for a country like Pakistan. India in the recent past has conducted its trade with Iran in Indian rupees – the Government of Iran opened a bank account in India, sold its oil to India in Indian rupees, received money in such bank account and then used the money to buy Indian goods and products which were exported to Iran from India. We have recently agreed to have barter trade with Iran, Afghanistan and Russia on specific goods, including petroleum and gas. It is hoped that this initiative would be pursued with full seriousness and vigor. However, sustainable bilateral or barter trade would require strong economic ties, mutual trust, and stable currency conditions between the trading partners.
A consensus among political parties and other stakeholders, such as the army, is a must to ensure continuity and consistency in economic policies, regardless of changes in government. We need to have a well thought-out 20-25 years economic plan which no one should be allowed to play politics with such that it is materially changed or undermined for someone’s short term personal gain.
Sixth, political stability, namely the consistent and predictable political environment characterized by the absence of frequent changes in government, no political violence or unrest, and the existence of effective governance institutions, is critical in promoting economic development. Who with even basic business acumen can deny the significance of political stability? It is a must to create an environment which is conducive to investment, entrepreneurship, and long-term planning.
Seventh, a peaceful environment and the establishment of law and order creates a stable and predictable atmosphere, allowing businesses to flourish, encouraging long-term investment, and facilitating sustainable economic growth. The recent reemergence of acts of terror in various parts of Pakistan poses a serious challenge; the decision-makers will have to deal with the root causes of all terrorism to be able to ensure lasting peace and sustainable economic growth in Pakistan.
Finally, a Charter of Economy is essential to meet Pakistan’s biggest challenge, that is, how to create a trade surplus. Given the events of last five years or so, there appears to be a need for a new charter of democracy which may give birth to the charter of economy. A consensus among political parties and other stakeholders, such as the army, is a must to ensure continuity and consistency in economic policies, regardless of changes in government. We need to have a well thought-out 20-25 years economic plan which no one should be allowed to play politics with such that it is materially changed or undermined for someone’s short term personal gain. Conceiving such a plan and implementing it with consistency is not as challenging as making a nuclear bomb over a period of 25 years or so.
Briefly, a comprehensive strategy, including the diversifying of the country’s exports, the promotion of specific industries, reducing and substituting imports, offering tax breaks to growing industries, and fostering bilateral trade relations, with a clear focus on sustainable economic policies and political consensus can pave the way for economic growth and stability in Pakistan resulting in much needed trade surplus.