Diversifying exports | Political Economy

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The export sector is at an important confluence. For years, its dependence on textile has created the country’s external trade profile, but the landscape is changing globally and Pakistan must be molded or endangered.

Textiles still account for a significant portion of total exports, demand, pricing, or any market volatility in trade sanctions influences national economic stability. The latest trading data highlights the weaknesses of this structure.

In fiscal year 23, Pakistan’s exports were about $ 27.7 billion. This led to a significant reduction over the previous year. Although the Global Economic Head Winds played a role, one of the main issues was the country’s failure to diversify its export portfolio in terms of country products and locations.

The formation of exports has changed drastically for more than two decades. Textiles, rice, leather and some other agricultural items dominate this compound. The Higher Education Commission’s financing research project, titled, a sewing time: The diagnosis of the declining export performance of Pakistan textile has widely analyzed the situation and identified structural barriers to both policy and industry dynamics.

Although its rivals, such as Bangladesh and Vietnam, have aggressively spread to high -cost textiles and other industrial exports, Pakistan is lagging behind. Research shows that Bangladesh’s ready -made garment exports have crossed the $ 38 billion mark, which is a proof of strong trade policies and ease of business. On the contrary, Pakistan has struggled with incompetence in strategies to promote trade facilities, logistics and export.

The problem of the destination is equally severe. An important part of Pakistan’s exports is in just a handful of markets: United States, China, the European Union, the United Arab Emirates and Afghanistan. This excessive concentration makes Pakistan extremely sensitive to geographical political changes and economic misery in these regions.

Recent slowdowns in China’s economy and protection policies in the Western economies have already indicated a decline in potential exports. Pakistan has failed to join the emerging economies of unconventional markets such as Africa, Latin America and Central Asia. Even within Asia, where the regional trade framework, such as RCEP, has obtained traction, Pakistan is a non -partners, which lacks opportunities for strategic integration.

Beyond the macro image, industry -level challenges have also hindered diversity. Evidence suggests that lack of credit access to high energy costs, SMEs and bureaucratic barriers in trade rules include continuous obstacles.

The survey shows that the majority of exporters present energy costs as a major obstacle. Many people mention that there are difficulties for compliance and certification standards for high cost markets. Firms that have tried to attract artificial textile, pharmaceutical or processed food exports, fought with permanent regulatory support and investment privileges.

Balancing both products and destination strategies, Pakistan needs a bold and systematic approach to export diversity. At the product level, high -value manufacturing sectors should be preferred. The textile sector should move towards artificial fibers, technical textiles and fashion branding beyond its core products.

Investing in pharmaceutical exports must be increased, ensuring that local manufacturers can compete with regional players like India and Bangladesh. Given Pakistan’s widespread manufacturing base in Engineering and Auto Parts Industries, there is a long -lasting ability, but policy intervention is needed to establish global competitiveness.

Beyond the macro image, many industry -level challenges have hindered diversity. Evidence shows that high energy costs, lack of access to credit for SMEs and barriers to bureaucratic barriers to trade rule are repeated.

The diversity in the market should go hand in hand with these product shifts. Trade agreements with Africa and Latin America should be actively pursued, which will take advantage of Pakistan’s competitive powers in agricultural exports and medium -sized manufacture.

The Central Asian region offers a strategic opportunity. Pakistan will have to improve its trade relations through negotiations transportation agreements. China -Pakistan economic transit can play an important role in this. More engagement with Kazakhstan, Uzbekistan and Azerbaijan is needed to completely unlock the potential benefits.

Implementation Roadmap must be multi -tired, considering short, medium and long -term measures. In a short period, export facility measures such as digitalizing trading procedures, reducing energy costs for exporters and ease of access to SMEs should be preferred.

At the federal level, the Ministry of Commerce and Trade Development Authority should smooth export documents to Pakistan and introduce digital platforms that allow exporters to access new markets without interruption. At the provincial level, the industrial zone should be equipped with energy efficient infrastructure to reduce the cost of emerging exporters.

In the middle, Pakistan will have to discuss priority trade agreements with unconventional partners. A systematic engagement with Africa, which is in support of export credit insurance schemes, can open trade opportunities. Latin American economies such as Brazil and Argentina are major importers of textile and food products. Pakistan is not part of these markets. Export promotion offices are essential in these regions. At the industry level, export clashes for pharmaceutical and engineering equipment should be manufactured in Karachi, Faisalabad and Lahore.

Long -term strategies should be kept rooted in industrial change. Pakistan should go to the producer of manufactured goods from the high end, from the raw material exporter. Taking advantage of the emerging global demand, the auto sector’s capacity to export the components of power vehicles should be detected.

High -tech exports, including IT -powered services, have to get permanent investment, to ensure that Pakistan compete in the global digital economy. Trade reforms should focus on gaining membership in regional economic blocks, to ensure that Pakistan is not isolated from major trade partnerships.

Key stakeholders for implementation include the Ministry of Commerce, TDAP, the Federal Board of Revenue and the State Bank of Pakistan. Industry bodies, such as the All Pakistan Textile Mills Association and the Pakistan Business Council, should be actively engaged in the formation of a policy, to ensure that the private sector view is integrated.

International Development Partners, including the World Bank and the Asian Development Bank, can provide technical support and funds for capacity -making programs aimed at export competition.

Pakistan’s trade policy should be re -based on flexibility and growth. Relying on traditional markets and low value exports will not maintain a long -term economic expansion. A systematic, evidence -based approach is essential to supporting data -powered policy interference.

By adopting a diverse export strategy, Pakistan can increase economic stability, create high -value jobs and establish itself as a strong player in global trade.

Ahad Nazir is an Associate Research Fellow at the Sustainable Development Pepulisi Institute.

Dr. Amjad Masood is a senior assistant professor at Bahria University.

The authors can be reached to ahad@sdpi.org. The article does not necessarily represent the views of their organizations.