Pakistan has been Positioned Among the Regional Economies that Rack up the Lowest Revenue from Commodity Exports

The paradigm shift from aid-to-trade in national policy is no doubt a forward step for economic growth, especially for developing countries like ours. However, instead of producing worthwhile products through knowledge based economy, the focus has always remained on imports. The country is prone to pursue dependency on the produce of others instead of creating a demand in the international markets for the “Made in Pakistan” products. Without being able to create maximum jobs, businesses, local manufactures, domestic industry or entrepreneurship opportunities for the bulging unemployed youth of the country, it would be impossible to cope with law and order situation, militancy and economic crisis.

Pakistan has been positioned among the regional economies that rack up the lowest revenue from commodity exports as the United Nations Conference on Trade and Development (UNCTAD) report states “A developing country is considered a commodity dependent developing country when its commodity export revenues contribute to more than 60 percent of its total good export earnings”. The agency, however, found that Pakistan’s commodity exports as percentage of merchandise exports are 25 percent, accounting for 2.8 percent of the country’s gross domestic product (GDP).

The country is heading for economic hurricane as on one hand, it is faced with enormous challenges such as illiteracy, poverty, inequalities, corruption, energy and governance issues that have had a direct negative impact on the economic development and growth of the country. On the other, the country’s exports are being reduced as compared to imports, which have increased; the deficit created, thus debts are mounting up. Pakistan needs to rethink and reconfigure trading patterns for focusing on self-sufficiency.

The recent survey of Overseas Investors Chamber of Commerce and Industry (OICCI) shows slackness of the business confidence among the business community. The government is unresponsive to the concerns of domestic industry while from pharmaceutical to textiles and from autos to agriculture, exports being languished, agriculture slumped and business confidence dropped. The people are easily attracted towards foreign commodities and thus convinced due to their brands, logos, quality and companies. The nationalistic approach of marketing “Made in Pakistan” is altogether missing in the government agenda which is the way forward for decreasing imports and increasing exports.

The contraction in agriculture growth across the country during the last financial year has meant that anywhere between 50pc to 60pc of Pakistan’s population which relies on farm incomes, was badly hit. Anecdotal evidence from Pakistan’s rural belt has suggested a deepening of the crisis as consumer spending significantly contracted. This ranged from accounts of falling investments in farm inputs to farmers staying away from essential periodic investments such as the purchase of tractors and other implements, just to sustain themselves.

Meanwhile, the agriculture policy failure under the present government has been driven mainly by misplaced priorities and a refusal to take badly needed remedial steps. In other areas of macro choices, agricultural policies at the federal and provincial levels remain hostage to a lack of attention by members of the ruling structure. Without ensuring a sufficiently widespread participation of key sectors of the economy, any upturn as recently claimed by the government will remain unconvincing.

The Author is freelance columnist based in Islamabad.

Source: Pakistan Observer