Rethinking exports

Trade balance (or balance of trade) is the key indicator of the economic performance of any government. It has been decades that we are unable to achieve trade balance – or surplus – which persistently continues to be in favour of imports. During the last seven months (July 2020-January 2021), Pakistan has recorded the trade deficit of $14.963 billion, in spite of significant growth in exports during this period. Seemingly, there will be no improvement in the trade balance situation in the coming years too as our policy, unfortunately, remains traditional. Our exports are unable to grow under the normal global market conditions. At present, the items that we are exporting include textile products, cotton, cereals, leather and other consumer goods. The share of exports of these items constitute almost 80 percent of total exports. On the other hand, the share of engineering goods, including electrical machinery, fans etc., is even less than one percent.

It is an established fact that the export of engineering goods plays a critical role in the growth and sustainability of national exports. Many emerging nations, such as Malaysia, Thailand and Indonesia, focused on the export of engineering goods which led them to achieve trade surplus. Pakistan’s capital goods and engineering services have great potential in international markets.

Hussain Siddiqui

Islamabad