LAHORE, October 30 (APP): The Prime Minister’s Trade and Investment Advisor Abdul Razak Dawood said on Saturday that viable government policies had significantly improved the country’s export diversification over the past three years, which is the only way to increase export income.
In a meeting with the business community here at the Lahore Chamber of Commerce and Industry (LCCI), he said that diversifying markets and products is the best way to increase exports. “Our exports of traditional items to non-traditional markets have increased by 60%, while exports of non-traditional items to non-traditional markets have increased by 77% over the past three years,” he said. added.
The prime minister’s adviser said the government would introduce a Drawbacks in local tax and levies (DLTL) policy in which additional incentives would be granted on exports of non-traditional products. The government will also sign the TIR (Truckers Interchange Receipt) convention with Afghanistan for the free movement of trucks to Central Asian states and other parts of the region.
He said the government was targeting the Central Asian region to boost domestic exports. The government will also implement the Look Africa Policy and an official delegation will visit Nigeria next month.
Abdul Razak Dawood said the State Bank of Pakistan’s Temporary Economic Refinancing Facility (TERF), which expired in March, would be reinstated for SMEs and other targeted sectors.
The adviser said the engineering and iron and steel sectors would be the next area of focus for tariff rationalization. To a question, he said that the International Monetary Fund (IMF) was the main obstacle to reducing the sales tax rate. He said it was the IMF’s request that regulatory obligation be imposed on everything.
“Regarding the issues relating to SPG-Plus status and basmati rice, things are well under control,” he said and added that although there were challenges, these were. much lower than those of the last three years.
He said the cost of importing has been increased due to inflation internationally. Oil imports have increased in value. He said the Lahore Chamber would be represented on the Board of the Export Development Fund.
LCCI President Mian Nauman Kabir, Senior Vice President Mian Rehman Aziz Chan and Vice President Haris Ateeq, President of FPCCI (Federation of Pakistan Chambers of Commerce and Industry), Nasir Hayat Magoon, Former President of FPCCI Mian Anjum Nisar, former presidents of LCCI Cheikh Muhammad Asif, Shahzad Ali Malik, Irfan Iqbal Sheikh and members of the Executive Committee also presented their views during the meeting.
Mian Nauman Kabir said the Lahore Chamber has always advocated the effective use of the Export Development Fund (EDF) in consultation with key players in the economy. However, the LCCI was not represented on the EDF Board of Directors. Given the importance of the LCCI, it should be sufficiently represented on the EDF Board of Directors.
He said the issue of a sharp increase in the trade deficit requires urgent government attention. “In the short term, we urge the government to immediately implement a currency exchange with China from where our imports amount to around 13 billion dollars,” he suggested.
Mian Nauman Kabir proposed that to reduce the trade deficit, tariffs and regulatory duties on luxury and non-essential items be increased.
Mian Nauman Kabir said the local tax and levy (DL / TL) duty drawback facility for exporters would not be reduced but further strengthened in value-added sectors.
He said Pakistan’s export products were highly concentrated in a few product lines, with textiles, rice and leather accounting for nearly 70 percent of our exports. There is a need to diversify our exports, in particular by focusing on potential sectors such as pharmaceuticals, mechanical industry and halal food, etc.
He recommended that these potential export sectors of the economy be completely zero-rated so that their export competitiveness can be increased.
The president of LCCI said there was a need for collective actions to explore new export markets, as around 65% of Pakistani exports go to just 10 countries.
To improve our exports to untapped potential markets like Africa, Russia and Central Asia etc., formal banking channels should be established as a priority. This issue has already been raised before the State Bank and the Ministry of Commerce.
“We appreciate the government for reducing tariffs on many commodity lines over the past two years,” said Mian Nauman Kabir and added: “We recommend that the process of tariff rationalization continue and tariffs continue. import (customs and regulatory duties) on all raw materials not produced locally should be reduced.
He said the State Bank’s temporary economic refinancing facility, which expired this year in March, would be relaunched for targeted sectors. This program was really good for setting up new industrial units as concessional refinancing was provided.
He said access to finance for SMEs remains a persistent challenge. SMEs get only 6% of private sector credit in Pakistan, while the number of SME borrowers is only 180,000. In this context, the government should develop a concrete strategy in collaboration with private banks.
The LCCI president said the 17 percent sales tax rate on inputs to various export-oriented industries was extremely high and should be lowered.
Mian Nauman Kabir said that the pursuit of GSP plus was imperative for our economic survival, as the European Union covers more than 30 percent of our exports (around $ 8 billion).
He vowed, “We would like you to play an important role in making the business community government-facilitated for compliance with GSP Plus conventions.”
Former FPCCI President Mian Anjum Nisar drew the Prime Minister’s adviser to the long delays in the movement of goods at the Pakistan-Afghanistan border. He said there were long lines of trucks hampering trade between the two countries. He also called for a reduction in transport costs for Pakistan-Afghan trade.
FPCCI Chairman Nasir Hayat Magoon said the State Bank of Pakistan should control the exchange rate, which affected businesses.
LCCI Senior Vice President Mian Rehman Aziz Chan and Vice President Haris Ateeq said there was a need to ensure that electricity tariffs for export-oriented industries remain competitive, as any increases tariffs lead to a considerable increase in the cost of doing business. The continuous availability of gas (24/7), especially for exporting industries in winter, must be ensured.