$22.10 billion export target may not be achieved

[LahoreEstate]

KARACHI, Feb 4: Trade analysts and exporters are doubtful of achieving government fixed export target of $22.10 billion during 2008-09 as in first half actual export proceeds during July-December 2008 are almost one billion dollars less than proportionate projection amounting to $10.54 billion.

Pakistan’s exporters would have to fetch about $2 billion plus every month for next six consecutive months to achieve $22.10 billion target.

An analysis of last six months shows that highest export earning of $1.87 billion was achieved in the first month of July which was almost 28 per cent higher than exports in July of 2007.

“Fall in value of Pakistan’s rupee caused a rise in exports during July after which export proceeds showed a fall every month in the last five consecutive months. The total accumulated shortfall in target is close to one billion dollars and exporters would have to earn $12.5 billion in the next six months which seems to be an impossible task. The task is impossible because production cost has gone up manifold rendering us uncompetitive in world market,’’ explained Shabbir Ahmad, a leader of textile industry, and the second reason he gave is because of erosion of purchasing power in Europe and US because of severe recession.

“Never before in the last 61 years, Pakistan’s business was so hard-pressed as it is now and it is being ignored by the elected decision makers,’’ a well known senior garment exporter remarked angrily who wondered how and why people, like Makhdoom Amin Fahim and Rana Farooq Khan, have been given job to look after commerce and textiles when none of the two has any understanding of basic issues of their jobs.

No businessman in Karachi said whether Makhdoom Amin Fahim met any of them individually or in group, the Textiles Minister is said to have held a few meetings with textile exporters in Karachi, Lahore and other places.

But his response to the issues was rhetoric that lacked substance.

While the political leadership assigned to take care of business issues is found wanting in job orientation, frequent changes at bureaucratic level has shaken confidence of workforce in the business service institutions.

Frequent top-level changes in ministries of finance, commerce, textiles, industries and institutions, like Trade Development Authority (TDAP), have shaken confidence of lower cadre officials who are left guessing who and what next?

“No one in the government understands the serious implications of 10.5 per cent fall in export earnings against target and a six per cent drop in industrial production,’’ a banker said as according to him a six per cent fall in industrial production will impact agriculture as well.

“Rising cost of doing business and severe energy crisis have crippled textile industry to the extent that a reasonably good cotton crop is not being consumed locally.

“More than 65,000 metric tons of raw cotton has been exported in the first half of 2008-09 to Pakistan’s competitors in the world at almost 10 per cent less average unit price,’’ the banker said.

Fabrics is one textile product that has fetched more than one billion dollars in export during July to December and an over 12 per cent growth because Pakistan’s competitors in home textiles, Bangladesh, Turkey and a few other countries are on a buying spree.

Leather and leather goods which have been Pakistan’s traditional products for exports have come under pressure and showed over 12 per cent decline in export earnings than last year.

As against more than $600 million export earnings in the first half of the last fiscal year, leather goods export in the first half of 2008-09 amounts $526.35 million.

The only encouraging factor on the export front is small increases in a variety of items ---molasses, fruits, chemicals and pharmaceuticals, marble and granite, jewelery, meat and cement. But cement export to India is coming under problems following change in relationship between Pakistan and India and slump in construction business in Duabi.

“If we manage to export $20 billion at the end of day, it won’t be too bad,’’ said a business leader. But he expects a balance of trade in 2008-09 less than 2007-08 because import bill will shrink.

http://dawn.com/2009/02/05/ebr4.htm