Experts call for economic diplomacy overhaul to revive stagnant exports

KARACHI: Pakistan needs to boost its economic diplomacy and align its public and private sectors to increase its exports, which have been stagnant for years, experts said on Thursday.

They were speaking at a seminar on "Ramping Up Exports -Roadmap to Economic Prosperity". They identified several factors that hamper the growth of exports, such as limited political diplomacy, a lack of trust between private enterprises and government entities, and inadequate energy allocations for the export sector.

Dr Moeed Yusuf, former security advisor, said the country lacked a coherent strategy for economic diplomacy, which resulted in low exports and a weak economy. "The government ministries are uncoordinated on plans as to how national exports can grow on the global markets... as the economic diplomacy widely stands contended," Yusuf said.

He said the country throughout its history stuck to underpin its economy with the security services for which it has been part of SEATO, SANTO, etc. "With no mechanisms in the country to check on foreign financial aids during the conflicts... there was nobody to question thier spending even the US never bothered to ask about them," Yusuf said

He said that there is also a need for defining the objectives for augmenting the country's economy without debts acquisitions, and recommended that the government should appoint professionals from the private sector as economic diplomats, instead of its own officials.

Tariq Ikram, former CEO Trade Development Authority of Pakistan (TDAP) said that the country has huge potential to flood the world markets with its goods and fetch billions of dollars in return.

Pakistan needed an urgent economic growth to offset the impact of debt servicing, which consumes half of the national fiscal budget annually, Ikram said. He said Pakistan's total debt stood at $125 billion

"The country needs a desperate economic growth to cancel out the huge debt servicing effects, .... (as) half of the national fiscal budget just lost into retiring the loans annually. A total of $125 bullion debt haunts the nation."

Dr Ishrat Hussain, the former governor of State Bank of Pakistan (SBP), said the governments should formulate their economic policies with clear intentions to facilitate the private sector, which is the engine of growth.

"Every succeeding government should carry on the same policy to retain the private sectors confidence, besides helping a stable exchange rate for investments," Hussain said. "The governments should remove all taxes from the exports sector, promote digital economy and step up for the research and development in different fields."

He said that there is also a need for the exporters facilitation, ending of bureaucratic and other hurdles, ensuring the allocations of sufficient energy supplies to the exports manufacturing units and initiation of the technical, vocational education in the country.

He also asked the private sector to stop going for tax concessions and subsides, start training its workforce, appoint laborers on a permanent basis and not as contractors or daily wagers to give them a sense of job protections.

Hussain also urged the private sector to stop looking to the EU for GSP plus facility or the US markets for its exports, rather shift its focus to the Asian nation like China, Japan etc., for huge returns. "One percent exports to China will fetch $24 billions."