Karachi:- Pakistan imports ninety percent of pulses, which consumed in the country from other countries this was not the case thirty years back, it was said by Dr Asad Saeed, Director, Collective For Social Science Research at a discussion on “Pakistan Current Economic Predicament” at the Pakistan Institute of International Affairs (PIIA) on November 9th, 2018.
He said Pakistan frequently face Balance of Payment Crises as the current IMF program is 13th since 1982. There is no country that reverted back to the IMF so frequently. It pulls the moral of the nation down. Significant current account deficit is the reason of balance of payment crises. Trade deficit an outflow of interest payments on loans are some of the biggest elements of the current account deficit.
In the last years, the import line is gone north and the exports have remained quite flat from 2010 onwards. We had negative nominal growth in exports. In comparison to exports with a percentage of GDP, Pakistan is doing much worse than India and Bangladesh. One of the important reason for the decline in exports is the tendency of governments to keep its over value exchange rates- which are bad for exports and very good for imports. This policy suits those governments who have a very short-term view of the world and whose is to deliver at that point in time. Overvalue exchange rates subsidize other countries and it delivers in consumption net growth, which happened in 2003-2004 during Musharaf’s period and in 2014-2015 during Nawaz Sharif government.
Dr Asad further added that since the 1970s to till today, the composition of Pakistan’s exports has not altered much. Two-third of our exports comes from the textile sector. There is very little diversity in our exports as we export only a few things. In the textile sector, Pakistan has lost its market share to Laos, Cambodia, Vietnam and Bangladesh.
One of the reasons of our low growth in exports is because of the hurdles of trade with India as Pakistan manufactured very good ladies clothes, designer lawn and good quality Achar, Chatni, Nimco which have mainly demand in North India.
He further said that there is an accumulation of wealth in Pakistan could be due to ransacking in the economy, corruption in the economy, outright looted plunder or other reasons but this capital accumulation is not translating into productive investments as it happens in the developing countries like Pakistan.
Atiq-ur-Rehman trade analyst, who was the second speaker at the discussion, said there is no need to exports confectionary items like biscuits, toothpaste, shampoos from Thailand and Malaysia as we produced the best quality of these items.
He said we need to encourage our local industry. At least make it tax-free for at least five years and you will see its tremendous growth. There is also a need to encourage non-residents Pakistani to invest in Pakistan. He also encouraged to have simplicity in life and forget luxuries in life which would defiantly impact positively on our economy.