FPCCI considers $10 billion export target as 'insignificant'

KARACHI (November 05 2002) : The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) considers Pakistan's export target of around 10 billion dollars as “insignificant”.

A study on “Trade between Pakistan and major regional economic groupings”, published by the FPCCI, observed that “for a country of over 140 million people with great human and natural potential, the export target was quite insignificant as compared to exports of around 150 billion dollars of Korea, which had a population of around 47 million only.

Similarly, Holland with a population of around 16 million had incredible exports of over 200 billion dollars.

According to the findings of the study, “Pakistan depends heavily on the developed countries, which are united under three gigantic alliances namely G-8, European Union (EU) and North American Free Trade Agreement (NAFTA).

“This is evident from the fact that the average percentage of exports for five years since 1997-98 to 2001-2002 is 34 percent for G-8, 21 percent for the EU and 18 percent for the NAFTA countries. The highest exports are to G-8 countries, whereas the lowest exports are to the Mercado Comun Del Sur/Merceado Comum Do Sul (MERCUSOR countries,” it said.

On the import side, the study said the highest imports were from the Indian Ocean Rim countries, adding this was because of the fact that Pakistan was importing oil from a few Middle Eastern members of the Indian Ocean Rim, such as Iran and the UAE. The study said the lowest imports were from the SADC states, comprising South African countries. “The average percentage of imports for five years during the same period is 24 percent for Indian Ocean Rim, 21 percent each for G-8 and GCC, 13 percent for the EU, nine percent for the ASEAN, six percent for the Nafta, two percent each for the ECO and Saarc and one percent for the MERCOSUR countries,” said the study.

The study further said that the government must adopt innovative techniques and an aggressive marketing approach to achieve a major breakthrough in exports.

“We must study the factors that enable the smaller countries, particularly in Asia, to attain export figures in three digits. For instance, Korea's remarkable export performance is due to their primary focus on engineering and automobile goods.

“Pakistan, on the other hand, has so far not given special preference to exports of engineering products and relying mainly on traditional products like textiles. It must, however, be acknowledged that despite cancellation of export orders and global recession, coupled with stiff competition from other textile exporting countries, we earned 5.80 billion dollars from textile exports during 2001-02, which is 69 percent of our total exports. This is indeed a great achievement,” it said.

The study further highlights that “our cotton products will have to face cut-throat competition in the quota-free regime, starting from January 2005 and with the entry of China into the World Trade Organisation (WTO). The present government is laying more emphasis on promoting non-traditional products to new markets.

“During 2001-02, Pakistan was able to export in good quantity some non-traditional items, like wheat, molasses, electric fans, electrical machinery, footwear, petroleum products, furniture, auto-parts, etc. Similarly, we were able to penetrate into virgin markets of Kenya, South Africa, Greece, Mexico, Iraq, Jordan, Yemen, etc.

“It is expected that the incentive given in the current trade policy to provide 25 percent subsidy for exports of new products will provide our exporters a major breakthrough in the international market,” said the study.

The study was launched by the Chairman, Export Promotion Bureau (EPB), Tariq Ikram, at the FPCCI Head Office here last month and had expressed happiness over the role of FPCCI, which was moving towards research and analysis.

The FPCCI President, Iftikhar Ali Malik, said that the earlier editions of the study were great success and highly appreciated within and outside Pakistan, which “motivated us to further improve the contents and quality of the publication.”

He said that the onset of trade liberalisation and borderless economies had brought many uncertainties and opened doors to opportunities for finding new markets and new co-operation models.

He suggested that the EPB should purchase at least 500 copies of the study and send it to Pakistan Trade Offices abroad, and further demanded that Rs 50 million be granted to the FPCCI for setting up its Research and Development (R &D) Department.

The Secretary-General of FPCCI, Dr Anwarul Haque, in his vote of thanks, acknowledged the support and patronage of the FPCCI President in bringing out the publications.

He expressed the hope that co-operation between the EPB and the FPCCI, particularly in export promotion and research and development activities, would further strengthen.

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