I just read a news report of Dawn covering what the Honorable Adviser to Prime Minister for Commerce, Textile and Industry Production Razak Dawood said in Karachi lately. His narrative seems completely detached from ground realities and he sounds talking from utopia.
His statement of increasing the volume of export to a historical level in 2019 is nothing but wishful thinking without any strategy, wishes can’t be horses. PTI government has not succeeded in containing ‘confidence deficit’ that is a must for boosting economic activities. Local manufacturers continue to face eroding competitiveness due to persistent increase in cost of doing business. If exporters are not competitive in the global markets, how can they convince the overseas buyers to buy ‘Made in Pakistan’ brand?
His narrative, “Reducing imports is vital for economic growth” sounds alien. Is he not aware that the largest portion of Pakistan import bill comprises of energy products that just can’t be reduced because the country can’t increase production of crude oil and diversify products produced by local refineries in a short span of time. Added to the burden is the recent hike in import of LNG. Power plants are being run on furnace oil on the pretext of higher cost of generation. The advisor needs to check quantum of gas and electricity pilferage that needs to be contained and recoveries ought to be boosted. This will automatically improve income of gas marketing companies and electricity distribution companies.
The talk about export led growth is nothing but ritual devoid of concrete measures. Has the minister bothered to look at Pakistan’s key exports? Nearly 65% of total export proceeds come from textiles and clothing. Pakistan carries the label of ‘producer of low quality and low price products’ and its share in international trade of textiles and clothing is less than 3%. Despite enjoying all the conceivable incentives the manufacturers have failed to boost exports in any significant manner in the last three decades. Pakistani manufacturers of textiles and clothing have lost competitive advantage. Export of raw cotton, yarn and unprocessed cloth supports Pakistan’s competitors in made ups market.
He referred to low production and productivity of agriculture sector. Doesn’t he know that it is the outcome of use of uncertified seeds, shortage of water and poor agricultural credit disbursements? Agricultural experts have been saying that Pakistan can get 20 million bales of cotton without increasing area under cotton cultivation. The problem has been further aggravated after construction of sugar mills in the cotton growing belt.
Pakistan has the potential to produce surplus fertilizer, wheat, rice, sugar and edible oil but bad government policies are the biggest hurdle. Fertilizer plants don’t get gas, cost of production of wheat, rice and sugar are high and edible oil of around US$2 billion is due to the policy makers supporting the groups having vested interest in import of vegetable oil. Its biggest proof is that over 1000 palm oil plants were planted in the coastal area of Sindh. However, the policy planners forgot to import nutcracker, they not been able to rectify this mistake in last one decade.
The adviser is a renowned academician. His bookish knowledge must be very strong, but translating knowledge into sustainable policies needs taking into account ground realities. If he is unaware of ground realities, he can be conveniently misled by those having vested interests.