ISLAMABAD: Under criticism for incessant negative growth in exports, the Commerce Ministry has reportedly tailored a Mid-Course Review Supplement of Strategic Trade Policy Framework (STPF) 2015-18, aimed at broadening incentives and enhancing competitiveness of neglected export-oriented sectors, well-informed sources told Business Recorder.

The Commerce Ministry’s Trade Policy Wing has almost finalised the draft of revised STPF for the remaining ten months of the current fiscal year, which also covers areas of concern leading to decline in exports, to be submitted to the federal cabinet soon for approval. The STPF will also identify the policy gaps and procedural requirements to further streamline the regulatory framework and reduce cost of doing business.

Under the STPF, 2015-18, a total Rs 6 billion has been allocated for the current fiscal year but Finance Ministry has not yet released the entire amount meant to be spent on export enhancement plans.

Pakistan’s trade deficit increased to $3.204 billion in July 2017, up by 55.46 percent over $2.061 billion for the same month a year ago, according to Pakistan Bureau of Statistics (PBS). Provisional trade data released by the PBS for the month of July 2017 noted 10.58 percent increase in exports and 36.74 percent in imports during the month under review. Exports have increased to $1.631 billion in July 2017 from $1.475 billion for the same month a year before and imports to $4.835 billion from $3.536 billion.

According to sources, Commerce Ministry will relax conditions for exporters and recommend reduction in tariffs of electricity and gas for export-oriented industry to make it viable vis-à-vis Pakistan’s competitors.

“We are aware that competitiveness of export sector is adversely affected by increased cost of production, including high labour cost, devaluation of currency by major competing countries, duties on input, eg, GIDC, surcharge on electricity and taxation structure,” the sources added.

An official told Business Recorder that Pakistan’s poor export performance is due to the export base being narrow, ongoing but continuously declining power shortages, poor infrastructure, global price developments of commodities negatively impacting on our major exports, weak investment growth, business and security climate, weakening external demand and exchange rate appreciation.

Former Prime Minister Nawaz Sharif had announced a Rs 180 billion trade enhancement initiative for the business community which would be applicable for nearly 18 months, ie, from January 16, 2017 to June 30, 2018, of which Rs 107.5 billion were meant for textile sector whereas Rs 12.5 billion were allocated for drawbacks on export of non-textile products.

Shortage of energy supply, poor quality of infrastructure, outdated technology, lack of export culture and weak contract enforcement mechanism are amongst the cross cutting factors, the sources maintained.—MUSHTAQ GHUMMAN