Poor planning, corruption destroy export potential

LAHORE: Resilience of Pakistanis has been proven time and again but there is a limit to which this resilience can be tested. The country has risen after every downslide, and those responsible for the downslide have remained unpunished.

After every economic debacle we are told that our potential for growth is very high. People of Pakistan face numerous difficulties when economic recovery starts as most of the times the indirect taxes are increased instead of grabbing tax evaders.

Our failure lies in our inability to root out corruption, nepotism and bad governance. We fail because we do not follow rules and law and revere smugglers and lawbreakers. We are going downwards because we follow individuals instead of principles.

The elite in Pakistan and that includes bureaucracy has invented ways to justify their lavish lifestyles; beyond their incomes. Our poor are afraid of police that on paper is there to protect their honour and dignity, while the rich scorn the same police and break law with impunity.

Most of our politicians change sides according to the tide, and we elect almost the same people to the parliament who failed to deliver in the past three decades.

Despite having abundant resources, we are unable to exploit this potential as our economy is hostage to vested interests.

We have more resources than Brazil, Indonesia or Bangladesh that have almost the same population as that of Pakistan. We are placed lowest in all indicators against these three economies.

There are sunshine sectors in Pakistan each of which has the potential to wipe out the entire trade deficit of the country. Pakistan can wipe out its entire trade deficit by paying proper attention to export of halal meat.

Exports the world over are zero-rated. But in Pakistan complete zero-rating is not possible due to bad governance.

Still, exporting sectors like textile, leather, and surgical appliances and sports goods are given incentive to buy inputs without payment of sales tax. The other exporting sectors are denied this facility. They are not entitled to any refund even on exports on the taxes that they pay on their input. In case of poultry, even the 47 percent duty they pay on imported spices needed to process different poultry products is not refunded to the exporters of processed poultry.

Halal poultry exports from Brazil are worth $30 billion per annum. These exports are mainly imported by Saudi Arabia and other oil rich Gulf countries. Pakistan being a natural halal producer can fetch this market in three years if the input taxes on poultry processing are refunded. Our country is still exporting some processed poultry products to Saudi Arabia, Doha and Qatar but the quantity is very low because the export prices are higher due to taxes that are not refunded.

Any reasonable bureaucrat can sit down with the poultry processors and work out the actual refund that the sector is entitled to on exports. The poultry processors have provided the documented list of taxes that they pay on their products meant for exports. It is up to the government to verify their claim and issue an order in this regard.

The engineering sector has remained neglected although it accounts for 67 percent of global trade. The value-addition in engineering sector is beyond limit, but our entrepreneurs are depending on low value-added products because the government never bothered to remove their hurdles and facilitate them in obtaining long-term loans on subsidised rates.

The software exporters do not need any facilitation involving finances but they do need reliable infrastructure, particularly fast and speedy broadband plus hook and play facilities.

The pharmaceutical sector needs prudent regulations only to capture the global generic drug market. Some Pakistani concerns have made inroads in the European Union and England where they replaced some reputable Indian pharmaceuticals.