October 03, 2007	Wednesday	Ramazan 20, 1428

KARACHI, Oct 2: Pakistan’s exports remain vulnerable and shaky as these remain confined to hardly three dozen items and a narrow base of less than two dozen international markets despite all efforts put in to promote business in South America, Asia and other parts of the world by President General Pervez Musharraf to chairman of Trade Development Authority of Pakistan in last eight years.

In 2006-07, the last of five years rule of “elected governments of three prime ministers and one president” hardly 36 items contributed more than 92 per cent of the export income. The remaining 8 per cent income came from a variety of miscellaneous goods which did not show consistent export trend.

Officials in TDAP, however, claim that some improvement has been noted in export of non-traditional items during the last fiscal year. The TDAP chairman informed newsmen last week that export of non-traditional items netted $175 million which when compared with total exports of over $17 billion is not even peanuts.

The European Union and the US are still two markets that absorb more than 52 per cent of Pakistan’s total exports. A levy of 13 per cent anti-dumping duty on home textiles import into the EU since 2003 which was later brought down to 5.8 per cent in 2005 has impacted on Pakistan’s total exports.

It explains Pakistan’s dependence on EU markets. This year (2007-08) too, home textiles export to EU are falling because of the impact of 5.8 per cent anti-dumping duty.

Middle East and Eastern Asia are the other areas where some of Pakistan’s exports are absorbed. Exports to Africa, South America, Africa and a few other regions have increased but not very significantly.

Afghanistan emerged as a market of Pakistan for which the prime minister hoped that it will exceed $1 billion mark. But in 2006-07 and in current fiscal year, exports to Afghanistan are not very encouraging.

After President Musharraf visited Mexico and a few South American countries as top salesman of Pakistan about two years ago, it was expected to show results. Nothing significant has come out so far. South America remains a distant land as far as exports are concerned.

Cotton and textile still remains the mainstay of export that gives enormous clout to the textile tycoons to bring pressure on government for maximum gains.

It still contributes 64 per cent of total export earnings, the bulk of which comes from low value items like yarn, fabrics, home textiles and apparels. In all, there are 14 items that contribute about 64 per cent export earnings.

For maintaining an edge of textile export, the government offered Rs28 billion in rebates and rate discount on bank loans. The textile tycoons now want more concessions and incentives and are demanding a two-year moratorium on loan repayment.

“Textile industry is under pressure at home and in international market,’’ Federal Commerce Minister Humayun Akhtar Khan responded to a question at a press briefing in Karachi last week.

With bulk of $5 billion investment in textile in last five years going into spinning, the textile operators are uncomfortable because they are losing their markets abroad where their buyers have invested in the same

field.

In domestic market too, shrinking of fabrics and home textile export has led to a drop in yarn demand causing a build-up of inventory and defaults in loan. Default in loan has forced bankers to think twice before offering credit margins to the spinners.

For long leather and leather products also contributed significantly in exports. But export of these items particularly the leather garments and shoes did not show growth.

Pakistan still exports wet blue leather rather than value added leather products. Total exports of all five leather and leather goods fetched a little over $1 billion.

In 1980s, Pakistan aspired to become a major supplier of fruits and vegetables. But as it turned out Pakistan has now become a big importer of a variety of food items including vegetables. Very few fruits mostly citrus, dates, mangoes and few vegetables are exported.

Total exports are worth hardly $200 to $300 million.