KARACHI, MAY 21 /DNA/ – The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) Chairman Mian Anjum Nisar, terming the ban on import of luxury items as necessary, stressed the need for also taking serious measures to control burgeoning food import bill to help boost the country’s faltering economy, as Pakistan’s oil and eatable import bill has surged by almost 60% to near $25 billion in the 10 months of the current fiscal year.
The FPCCI former president said that the rising food imports and the resultant trade deficit should also be taken care by the authorities, as the country has spent over $8 billion on the import of edible items in the last fiscal year. To bridge the food production gap, the food import bill surged by more than 12.30% to $8 billion in 10MFY22 from $7 billion in the same period last year. The import bill might go up further in the coming months because the government continued to allow importing wheat and sugar to build strategic reserves.
The BMP Chairman observed that the economic managers will have to chalk out a long-term plan for import substitution and increasing exports so that Pakistan could become self-reliant. He also emphasized the need for the adoption of international best practices for priority sectors and consultations with international experts to achieve success. He stressed upon the need to enhance inter-ministerial coordination and public-private partnership for increasing exports.
The country’s overall import bill increased by 47% to $65 billion in 10MFY22 compared to $44.73bn in the corresponding period last year. The share of these products in the total import bill also rose to 38% in 10MFY22. The steady increase in these two sectors’ import bills is causing a trade deficit and putting pressure on the government’s external side.
Referring to the data released by the Pakistan Bureau of Statistics, Mian Anjum Nisar stated that the import bill of oil increased by over 96% to $17 billion in 10MFY22 from $8.69bn over the corresponding months of last year. Further breakup showed that the import of petroleum products went up by 121.15pc in value and 24.17pc in quantity. Within the food group, the major contributions came from wheat, sugar, edible oil, spices, tea and pulses. Edible oil imports witnessed a substantial increase in both quantity and value terms. Due to rising world prices, the palm oil import bill grew by 44.64pc in value in 10MFY22 to $3.09bn from $2.14bn in 10MFY21.
As a result, the domestic prices of vegetable ghee and cooking oil also went up. The import of soybean oil increased by 101.96pc in value and 9.30pc in quantity in 10MFY22 from a year ago. Wheat imports, on the other hand, fell 19.12pc to 2.206 million tonnes in 10MFY22, from 3.61m tonnes in 10MFY21. Sugar imports increased by 49.52pc to 311,851 tonnes in 10MFY22, compared to 280,377 tonnes in 10MFY21. The import bill of pulses, tea, and spices also grew rapidly during the period under review.
The chairman of the BMP, the ruling group of the FPCCI, said that the situation is in control due to sustained increase in remittances.
The FPCCI former president said the government has to formulate long-term and consistent policies for the revival of industry and considerable improvement in exports, as contrary to regional countries, Pakistan’s exports have remained stagnant during the past 40 years, and unless attention was paid to all factors that hamper industrial and exports growth, the country might not be able to achieve desired results.
He said the low exports volume and rising trade deficit were chronicle issues which should be resolved permanently. He said exportable items should be produced in accordance with the international demand to fully exploit the benefit of GSP-Plus status. He said that several industries and sectors were neglected in past. He said decisions should be made in national interest, keeping aside the personal agenda.
Mian Anjum Nisar stated that Pakistan’s trade deficit keeps on widening despite a much-trumpeted increase in exports, which were, in fact, not sufficient to match the huge surge in imports.
The long-term strategy needs structural reforms of the entire export sector, including high tech and innovative products, value-added exports commodities and market diversification towards unexplored markets like South America and Africa.
Some of the impediments to industrial growth include cost of production, poor governance, obsolete technology, low productivity, lack of competitiveness, supply constraints, and energy issues.