KARACHI, April 28: Mainly because of a small and narrow base, Pakistan’s exports to some of the non-conventional markets, like Central and South America and Africa, have shown an impressive growth, but in conventional markets, like North America, EU, Middle East where export base is relatively large, the growth is insignificant and small.
A market-wise analysis of first five months (July-November 2006) of the current fiscal year shows that Pakistan’s exports to Central America went up by 76.49 per cent and in South America the export growth is 48.37 per cent.
In 40 countries of Central America, exports increased from $29.44 million last fiscal to $51.97 million. In 31 countries of South America, exports amounted to $95.90m in July-November 2006 as against $64.63 million in 2005.
Only six per cent growth is seen in 15 EU countries where in first five months, Pakistan shipped goods worth $1.80 billion as against $1.69 billion last year.
In North America that includes major trading partners, like US, Canada, the export growth is only 7.33 per cent.
Total exports to North American countries went up to $1.98 billion this year from $1.85 billion last year.
In Middle East, the export growth is negative. In UAE, the export trends in first five months of 2006-07 show 8.5 per cent negative growth.
Exports to UAE are down to $468 million this year from about $512 million last year.
Other than the UAE, exports to Middle East were up by an insignificant ratio of 2.18 per cent to $495 million.
This is despite the fact that exports to Iraq via Jordan-based Iraqi businessmen, has shown a phenomenal growth of more than 216 per cent to more than $21 million.
Like UAE, exports are down in Bahrain, Lebanon, Oman, Saudi Arabia and Yemen.
In 57 countries of Africa, Pakistan’s export growth in first five months of 2006-07 is about 11 per cent to about $345 million.
Egypt, Kenya and South Africa are the main trading partners of Pakistan in Africa. In Asia, the growth of Pakistan’s exports is less than one per cent from $1.43 billion to $1.44 billion.
In East Asia where Pakistan has major trading partners, like China, Korea and Japan, the exports grew by only 3.35 per cent to $628.18 million.
Pakistan signed FTA with China and could ship only goods worth $206 million in first five months.
In Japan, Pakistan’s exports are down to $55.75 million from $57.68 million.
In Korea, Pakistan’s exports are down by more than 63 per cent to $442,000 only.
The export scene in South and Central Asia is worse than Central Asia where growth is negative three per cent. Afghanistan, which was emerging a fast growing market for the last few years, is now showing negative trends this year where exports in first five months are down to $359.75 million from $398.22 million last year.
Out of 12 South and Central Asia countries shown in official statistics, Pakistan’s exports are down in 10 countries this year.
Prospects for Pakistan’s export to 10 countries of South-East Asia look relatively better where about 10 per cent growth trend is visible in first five months.
This area too has important trading partners, like Malaysia, Indonesia, Philippines, Thailand and Singapore. Total exports in this region went up to $136 million from $124 million.
“Pakistan’s total exports have shown a growth of only 3.5 per cent in first nine months to $12.43 billion from $12 billion,’’ an analyst in a trade body said to stress that market-wise trend visible in first five months will remain by and large unchanged in the whole fiscal.
Traders and market analysts are convinced that Pakistan will not be able to achieve $18.60 billion target of the year 2006-07 as netting of $5.20 billion in April, May and June is very difficult if not impossible.
Increasing production cost, mainly because of rising transportation and interest charges, plus the infra structure handicaps, are some of the factors that are being mentioned as causes of poor performance of export business.
“Howsoever, when you talk of average annual 6.5 per cent economic growth in last four years, the real sectors — agriculture and industry — contributed not much,’’ a research analyst in one of the trade bodies said, who added that the real growth has come from services sector — banking, insurance, construction, retail and wholesale trade — which does not enlarge the base of commodities and goods.With total exports expected to end up at about $17 billion and imports to close at $31 billion by end June next, Pakistan’s trade imbalance will be a staggering $14 billion plus in 2006-07 which is bound to impact current account deficit and Pakistan’s foreign exchange sector.
