Anjum Nisar calls for urgent measures to boost exports, contain import bill
ISLAMABAD, SEP 9 /DNA/ – The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has expressed serious concern over the widening trade deficit, which surged by more than 18 per cent to $7.1 billion during the first two months of the current fiscal year.
BMP Chairman and former FPCCI president Mian Anjum Nisar warned that the growing gap between imports and exports could put renewed pressure on the country’s external account, foreign exchange reserves and exchange rate.
He said the latest trade figures were a clear indication that Pakistan could not afford to remain complacent about its external sector position. The trade deficit had increased from $6.03 billion in the corresponding period of the previous fiscal year, mainly because imports were rising at a much faster pace than exports.
He said the increase in exports was encouraging to some extent, but a 7 per cent rise to $5.46 billion was not sufficient to offset the 13 per cent increase in imports to $12.58 billion. The widening gap required immediate policy attention, particularly at a time when the country faced substantial external debt servicing obligations.
Mian Anjum said Pakistan needed to adopt a comprehensive and long-term strategy to increase exports rather than relying on remittances and other external inflows to bridge the external financing gap. He recalled that the country’s current account had remained broadly balanced in the previous fiscal year largely because of exceptionally strong remittance inflows, but this could not be considered a substitute for strengthening the trade account.
He urged the government to make export promotion a central pillar of its economic policy and take practical measures to improve the competitiveness of Pakistani products in international markets.
The BMP chairman said the government should focus on reducing the cost of production, particularly energy, taxation, financing and logistics costs, as high input costs were making it increasingly difficult for local manufacturers and exporters to compete with regional competitors.
He stressed that the country needed to move towards value-added exports instead of relying heavily on traditional products. Greater investment should be encouraged in sectors with strong export potential, including engineering goods, information technology, pharmaceuticals, food processing, agriculture-based products and other value-added industries.
Mian Anjum also called for a comprehensive review of the import structure, saying that import growth should be managed without disrupting industrial production. He said restrictions on productive imports or essential industrial inputs could adversely affect manufacturing and exports, therefore the government should distinguish between imports required for economic activity and non-essential or luxury imports.
He proposed a long-term import-substitution strategy aimed at developing domestic manufacturing capacity for products that could competitively be produced locally. This, he said, would help reduce pressure on foreign exchange while creating employment and strengthening the industrial base.
The BMP chairman said the government should also improve the trade facilitation system by simplifying customs procedures, reducing clearance time and lowering port and logistics costs. Efficient ports and a predictable regulatory environment were essential for exporters seeking to compete in international markets.
He stressed that frequent changes in taxation, trade and regulatory policies were discouraging long-term investment. A stable and predictable policy framework was therefore necessary to encourage businesses to expand production and invest in export-oriented projects.
Mian Anjum urged the State Bank of Pakistan and other relevant institutions to closely monitor developments in the external sector and take timely measures to avoid excessive pressure on the rupee. He said exchange-rate stability could not be achieved on a sustainable basis without addressing the underlying trade imbalance.
He also called for stronger coordination between the government, State Bank, trade bodies and export-oriented industries to identify bottlenecks affecting exports and formulate practical solutions. The private sector, he said, should be consulted before major trade and economic policies were introduced.
The BMP chairman said Pakistan had the potential to substantially increase its exports if the government provided a competitive business environment, affordable energy, efficient logistics and consistent policies. He stressed that export growth must be accompanied by industrial expansion so that the country could generate sustainable foreign exchange earnings rather than depending on debt and temporary inflows.
He urged the government to closely monitor the trade figures in the coming months and take corrective measures before the widening deficit became a larger threat to macroeconomic stability.
Mian Anjum Nisar said the latest figures should serve as a wake-up call for policymakers and urged them to put exports, industrialisation and reduction of the cost of doing business at the top of the economic agenda. He said a sustained improvement in the trade balance was essential for strengthening foreign exchange reserves, maintaining currency stability and achieving durable economic growth.
