The net foreign exchange reserves with the State Bank of Pakistan have now tumbled to below USD 10 billion, which are not enough to pay for even two months imports and the best way to improve foreign reserves is to promote foreign direct investment and boost exports. Therefore, the government should offer some special incentives in the upcoming budget to the exporters and foreign investors to boost exports and attract maximum FDI to the country. This was said by Jamshaid Akhtar Sheikh, Acting President, Islamabad Chamber of Commerce & Industry during a meeting with a delegation of the business community.
Jamshaid Akhtar Sheikh said that Bangladesh’s exports have crossed USD 43 billion during July-April 2021-22 showing an increase of over 35 percent compared to the same period of last year. However, Pakistan’s overall exports during July-March 2021-22 were just over USD 28 billion while our total imports during the same period shot up to over USD 62 billion. It shows that imports have increased by USD 34 billion compared to exports and this huge gap between exports and imports is the main cause of dwindling foreign reserves of the country.
ICCI Acting President said that Pakistan’s overall exports as a percentage of GDP have also been showing a falling trend for the last many years as they have come down from over 13 percent of GDP in 2013 to around 10 percent of GDP in 2020 while the global average was over 30 percent of GDP in 2013 and over 26 percent of GDP in 2020. This means that no serious efforts have been made to boost Pakistan’s exports for the last many years due to which our economy is now facing multiple challenges. He said Finance Minister Miftah Ismail has himself stated that the country’s 80 percent manufacturing was meant for local consumption and only 20 percent was for exports, which showed that Pakistan’s export volume is very low compared to other countries. He stressed that the government should fully cooperate with the private sector in the value addition of products and provide maximum support to the exporters in identifying new markets in order to boost exports.
Jamshaid Akhtar Sheikh said that the total FDI in Pakistan has also fallen by over 57 percent during the first 10 months of the current financial year (July-April) as it has come down from USD 3.6 billion to USD 1.5 billion during this period, which is not a good sign. He emphasized that the government should offer some good incentives in the coming budget to the foreign investors so that they could come to invest in Pakistan and produce value added goods for exports. It would achieve much better results for the country as currently Pakistan is mostly exporting raw material while other countries are taking advantage by using our raw material to produce finished goods that are exported at much higher prices in the international market.
ICCI demands special incentives for investors and exporters in budget
- June 08, 2022