KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday pointed out that improving regional trade and facilitating export support programmes could help shrink the country’s widening trade deficit.
It also lamented that Pakistan’s regional trade deficit has further widened as imports from 9 regional countries have increased by 28.84 percent, whereas, exports to the same have increased only by 16.97 percent.
FPCCI President Irfan Iqbal Sheikh said that these 9 countries were all geographically contiguous in the sub-regional periphery, including China, Afghanistan, Iran, Bangladesh, Sri Lanka, India, Nepal, Bhutan and the Maldives.
“Our imports with the regional countries clocked at $17.814 billion for the period of July 2021 to June 2022 as compared to $13.826 in FY21, which has put additional burden on rupee value and foreign exchange reserves.”
The FPCCI chief pointed out that this was a testimony that regional trade, as has been pointed out time and again by Pakistan’s apex trade body, was the key to accelerating exports in a sustainable manner. However, the government was still not ready to either think out-of-the-box to offer a facilitative environment or incentivise regional export support programmes. “There are regional blocs and countries in the world who have 70 – 80 percent of their total trade with the regional and sub-regional countries,” he added.
Sheik called for an enhanced focus on intra-regional trade through the platforms of Economic Cooperation Organisation (ECO), which has 10 countries and developing eight (D-8) countries.
He added that these alliances have some of the major economies and Pakistan could increase its exports with them in many major sectors, such as value-added textiles, sports goods, surgical equipment, rice, fruits and vegetables; construction materials and, most significantly, IT and IT-enabled services (ITeS).
“It is not a rocket science that tapping regional trade can enhance Pakistan’s exports by $5-10 billion within a short span of 2-3 years,” he added.
The FPCCI president proposed that Pakistan should actively work towards establishing efficient banking channels with regional countries for the sake of trade; establish large border markets; explore trading options in local currencies and assess practical barter trade mechanisms.