‘Pakistan needs major policy reforms to boost exports’ ISLAMABAD: “Pakistan needs major policy reforms especially concerning currency exchange rate, to enhance its exports and competitiveness in global markets. A pro-export policy shift is required in all economic policies to cope with declining exports in Pakistan”.
These were the sentiments expressed by speakers at a meeting ‘Export competitiveness and exchange rate management in Pakistan’ held at Sustainable Development Policy Institute (SDPI) on Thursday.
FBR member for Strategic Planning, Reforms and Statistics Dr. Muhammad Iqbal was of the view that depreciation in exchange rate has its complications at multiple levels and hence, it would not be advisable to go for this option without a careful calculation of all the corresponding factors.
He said that the perceived overvalue of exchange rate is not the only stumbling block in the way of our national exports.
“The government has lent its all-out support to business community of the country, especially to exporters”, Dr. Muhammad Iqbal remarked. According to him, tax avoidance practiced by businesses is one of the main factors harming the economy.
Dr. Vaqar Ahmed, Deputy Executive Director SDPI said that the government needs to come forward and step up the efforts to boost competitiveness of Pakistan’s exports. A comprehensive dialogue with the private sector is required on the prevalent exchange rate regime in Pakistan, which has implications for fiscal management and exports.
He added further that the independence of SBP in managing the exchange rate should be protected. In the case of textile sector, Ministry of Finance and Federal Board of Revenue need to look towards the favorable fiscal environment provided to exporters in peer economies such as Bangladesh, India and Vietnam – all have seen an increasing share in world exports.
Earlier Dr. Sajid Amin of SDPI, presented technical details on ‘Exchange rate regime in Pakistan and its impact on textile and other exports’ and said it was unfortunate that the governments mostly saw depreciation in exchange rate as a symbol of weaker economy and hence a challenge to their popularity.
Rehan Bhandara, Chairman Faislabad Garments City Company was of the view that expensive energy and high cost of business, coupled with the complicated tax regime were the major factors behind the decline in exports.
Ms. Romina Khursheed, MNA and member of Senate standing committee on Textile Industry assured the participants that the suggestions and inputs from would be welcomed by the standing committee.