Govt eyes $1.3 billion from industrial chemical exports

ISLAMABAD: Government is eyeing $1.3 billion worth of export revenue from industrial chemicals through establishing special economic zones dedicated to biotechnology, a minister said on Tuesday.

Ministry of science and technology is currently formulating a proposal for the promotion of research and development in the country specifically with reference to biotechnology and chemical production.

The proposal envisages a liaison between the business community, different universities and research institutions. “The proposal envisages an export value of $1.3 billion worth of chemicals that are used for different industrial purposes,” Minister for Science and Technology Fawad Chaudhry said during a meeting with Adviser to PM on Finance and Revenue Hafeez Shaikh.

Chaudhry said the science ministry is working on details to set up special economic zones to promote research in chemicals and biotechnology, initially in some major cities of the country.

“Research and development in the field will not only boost the quality of local production but also has chances to fetch foreign exchange by export,” he said. “A pilot project shall be started soon.”

The country exported $537.4 million worth of chemicals and pharmaceutical products in the first seven months of the current fiscal year, down around 18 percent year-on-year.

Chemical industry development is expected to provide substitutes to imported chemicals. The country spent $4.4 billion on imports under the agriculture and other chemical head in the July-January period.

Import reliance puts burden on foreign exchange position of the economy that is reeling from adverse current account challenges. Foreign inflows following IMF-backed loan program and remittances counterbalanced the erosive pressure of debt servicing. Last year, International Monetary Fund agreed to lend $6 billion to help the country put off balance of payment crisis.

Foreign debts, however, give temporary relief to chronological problems of foreign exchange deficiency and pass through payment pressure to incoming administration. Therefore, permanent remediation service is to build up local expertise to benefit from comparative advantage.

Historically, Pakistan industries draw more than 60 percent of exports revenue from textile industries and paid little attention on diversification to fields that can possibly be tapped. Subsequently, the country’s annual exports have been lingering around $20 to 25 billion for almost a decade.

PM Adviser on Finance Shaikh said the idea of promoting chemical industry is likely to offer bright prospects. He appreciated the role of the ministry of science and technology in bringing in innovative ideas for the promotion of exports and promoting projects “that will help in promotion of investment in research with commercial application”. The adviser assured the science ministry of all possible coordination and facilitation to get the proposal executed.