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Policy measures to boost export
EDITORIAL (April 15 2003) : The federal minister for commerce, Humayun Akhtar Khan, while addressing the members of Karachi Chamber of Commerce and Industry (KCCI) the other day made some important observations on a number of issues relating mainly to the country's exports.
He disclosed that the government would shortly announce new policy parameters to encourage export-led economic growth but the implementation of this policy may be undertaken by the government prior to the announcement.
This strategy, according to him, would inspire confidence among all the stakeholders to redouble their efforts on the export front.
The policy to achieve export-led growth is not a new approach to economic development.
In fact, the newly industrialised countries in South East Asia have achieved the desired results with a fairly rapid pace of industrialisation along with increase in exports of manufactured goods.
In Pakistan, too, the development of textile industry was achieved mainly through export incentives.
This direction, major steps taken earlier in 1960s and subsequently included Export Voucher Scheme, while supplier's credit for imported machinery import was allowed on the condition of obligatory exports in specified proportions.
However, at the present stage of development, some more meaningful incentives would be required to further improve the export performance.
The minister rightly emphasised the need of export-oriented industries seeking joint ventures with foreign investors with a view to bringing about technological innovations, besides entering into agreements to purchase brand names for selling their products in foreign markets.
Such efforts, it is felt, would have to be supported by suitable incentives for the local industries to broaden their marketing strategies in new markets, particularly exports with foreign brand names.
Similarly, tax incentives may be required to promote joint venture capital investment from abroad subject to the export of products from such ventures.
The government has no doubt already initiated a policy allowing establishment of warehouses in selected foreign markets for maintaining ready stocks of Pakistani products, which may be sold in those markets in phases.
But the scheme is yet to be fully implemented, which may be speeded up with appropriate incentives to the private sector to share the cost of maintaining warehouses abroad.
A new policy aimed at vigorously broadening the export of diversified products from Pakistan would have to be framed and implemented speedily.
These efforts are needed to prepare the local textile industry to compete in the world market successfully from 2004 onwards when the quota system in textile trade would be finally phased out.
The facility of protected quota share in the international textile trade would no more be available to our textile industry which would have to carve out its due share in the world market in an atmosphere of free competition.
The minister also disclosed that the government was contemplating establishment of a permanent Exhibition Authority that would be assigned the task of organising a comprehensive international exhibition in the country on an annual basis.
This step is also likely to contribute significantly to the country's export efforts. The local industries would be able to avail of the opportunity of displaying their products for export in this exhibition.
Moreover, foreign manufacturers are likely to establish their stalls in this exhibition with a view to selling their products, especially modern machinery and equipment and other electronic innovations.
Thus the annual exhibition under the patronage of the government is undoubtedly a welcome idea to make useful contribution to export efforts.
It is expected that the new policy promised by the minister for accelerating the pace of exports would unfold other meaningful initiatives and incentives for the industries to take advantage of.
The minister admitted that the present state of long delays in the refund of sales tax to export industries/exporters warranted serious measures by the government to overcome the difficulties.
In his view, small and medium industries with modest cash resources were the main sufferers due to their stuck-up refund claims.
One may expect that the minister would be able to find a solution to this problem to the satisfaction of exporters and export industries.
Source: Business
Recorder
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