October 20, 2006	Friday	Ramazan 26, 1427

ISLAMABAD, Oct 19: Prime Minister Shaukat Aziz has directed the commerce ministry to identify the reasons for an abrupt decline in exports during the first quarter of the fiscal year 2006-07, it is learnt.

Well-placed sources told Dawn on Thursday that the prime minister had held an internal meeting on the issue and directed the various ministries to find out the reasons for the sudden decline in exports, which would have a serious impact on country’s balance of payment.

Pakistan’s export proceeds reached $4.269 billion during July-Sept 2006 as against $4.153 billion in the same months last year, an increase of 2.80 pc. But the export of commodities declined by 4.53 per cent to $1.416 billion in Sept 2006 as against $1.483 billion in the same month last year.The sources said that the lack of coordination among various ministries, particularly the commerce, textile and industry ministries, in the trade policy formulation had led to the decline in export of textile products during the first three months of the current fiscal year.

They said the government policy of increasing exports through subsidies in the past years led to only mushrooming of exporters instead of improving the quality of products and developing skills of workers.

The textile exports, which constitute more than 65pc of total exports, have started declining from the first month of the current fiscal year. The export of textile products witnessed a decline in the range of 7-10 per cent during July-Sept of 2006 over the same months last year, despite a big package of subsidies announced by the government for the sector.

A source at the textile ministry told Dawn that textile tycoons had informally decided to slow down the shipment of their goods, which would result in a decline in overall export proceeds. “They are using this measure to press the government for accepting their undue demands as elections was also fast approaching,” added the source.

When contacted a senior official at the commerce ministry told Dawn on condition of anonymity that they were unclear about the sudden decline in exports. He said that there was no reason for the decline as the ministry had already achieved preferential market access for the textile and other products.