KARACHI: Pakistan Business Council (PBC) has urged the government to adopt an aligned and consistent series of policies and actions to boost exports and encourage import substitution to address the silo working and fragmentation between ministries.

In a letter to Commerce Minister Jam Kamal Khan on Friday, PBC chief executive Ehsan Malik sought the prime minister’s ownership and quarterly progress review to give exports and self-reliance the importance they deserve from all the key ministries.

In a comprehensive list of proposals, he cited uncompetitive energy cost, high cost of borrowing, poor market access versus key sourcing alternatives, exchange rates which for long periods favour imports over exports, delay in making the Export-Import Bank fully operational, denial of adequate foreign exchange to develop local brands abroad, absence of FDI in export sectors, delays in tax refunds, a fiscal regime which makes it difficult to wash exports clean of all taxes and duties in the extended value chain and dysfunctional EPZs as the main reasons for Pakistan’s poor export performance.

He added that these would require the alignment of policies and close collaboration between the ministries of commerce, IT, industries, finance, energy, foreign affairs, health, communications, and the central bank.

Malik also recommended time-bound incentives to encourage existing exporters to grow, diversify the export basket and broaden their reach. Similarly, the PBC supported new exporters to be assisted in developing markets abroad.

On import substitution, the PBC recommended an industrial policy which promotes import substitution with the objective of feeding into exports. However, import substitution should not be used as an excuse for indefinitely depriving Pakistani exporters and consumers of quality products at competitive prices.

Open-ended protection for domestic industry hampers both domestic as well as global competitiveness. Industries currently protected from global competition need to have a sunset clause.

At the same time,

Mr Malik called for effective and timely enforcement of anti-dumping duties.

Smuggling and under-invoicing of imports undermine domestic manufacturing. Electronic Data Interchange (EDI) with China and the UAE needs to be implemented.

Published in Dawn, April 27th, 2024