Focus on textile export, says new trade policy

21 Jul '08

6 min read

It is a privilege for me to present before you the trade policy for the year 2008-09; the first by a democratic government after a period of nine years. This is your government and it carries the hopes and aspirations of all of you who have given us a very important mandate.

Even though your Government has been in office for less than 4 months, our endeavor has been to draw up a trade policy that has a new direction and vision, and will have an impact on the lives of those who are the most needy.

In the recently announced Budget for 2008-09 and in this Trade Policy, the Government's focus is to take the benefits of development to the common man. Our aim is to encourage our businessmen, entrepreneurs, manufacturers and investors to continue striving to do more in their respective fields; and we are also striving to ensure that the fruits of any development trickle down to the people at the grass roots level

We have inherited a very difficult economic situation where the public is facing more hardships than it has in recent history. This was due to external and internal factors of the past year. On the external front the most difficult issues were;
• The doubling of international oil prices from around $68 per barrel to $ 145 per barrel during the year
• The slow down in the US economy and turmoil in the international financial markets thereby reducing external demand for our exports

On the internal front also we had more than our share of difficulties. This was a year of constant political instability sparked off by the judicial crisis in March 2007. The law and order situation also assumed dangerous proportions in the form of the Lal Masjid affair, the increase in frequency and lethality of terrorist bomb blasts and of course the state of militancy and insurgency in FATA and the NWFP.

The saddest occurrence in this regard was the martyrdom of Mohtarma Benazir Bhutto on 27th December 2007 which cast a long and dark shadow on the economic and political health of the country. It is estimated that due to disturbances in the five days following this tragic event the loss of our export revenues was of the order of $200 million.

Other challenges on the internal front that made it difficult for exporters to fulfill their export orders on time and at a competitive price during the year included:-
• Impact of monetary and exchange rate policies, plus supply side constraints.
• Increasing competition in export markets,
• Travel advisories of foreign governments discouraged importers to continue sourcing from Pakistan

Not surprisingly and as a result of these multiple negative factors our economic growth rate dropped to 5.8% as compared to 6.8% last year. This slow down was particularly evident in the commodity producing sectors such as agriculture and manufacturing with serious implications for exports. In fact agriculture overall grew by only 1.5% as against 3.7% last year and in the two major crops i.e. cotton and wheat there was a negative growth of 9.3% and 6.6% respectively.

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