OVERALL export earnings have surged more than 46 per cent over last four fiscal years or at an average rate of 11.5 per cent per year. But the growth has been driven mainly by a few categories.
These categories include food items, petroleum products, chemical and pharmaceuticals, surgical and medical instruments, cement and jewellery.
Export earnings from such key sectors as textiles, leather, and engineering goods have shown little increase. Data for nine-months of the current fiscal year do not indicate any big change in the trend except for that in some cases as in textiles and food items, exports have rather declined.
From FY07 to FY11, average annual growth in textiles was as low as seven per cent chiefly because of the global recession of 2008-09. It was only after the hike in international prices that that textile exports rebounded last year.
The same list of problems have afflicted the textile industry as all other industries in the country: gas and electricity shortages, low investment in technology, high interest rates and low bank lending.
Failure to implement policy initiatives laid out in the 2009-14 textile policy was identified as one cause behind dawdling textile export earnings in this fiscal year; but another major reason is the slow US recovery and the double-dip recession in the UK and other parts of Europe.
However a couple of other categories have shown remarkable growth.
Take for example food items. Export earnings of food items have more than doubled during the last four fiscal years on the back of higher-than-expected production of cash crops, increase in exports of meat and meat products, penetration into newer markets by exporters of seafood—and more important, standardisation and packing of exportable fruits and vegetables.
This is why meat, fish, fruits and vegetables now account for about half the total food exports, while exports of rice which hit the $2 billion peak, is down because of a glut in international markets.
According to printing and packaging industry, improved packaging has played a key role in boosting export earnings, particularly with regard to food products.
In March this year, Pakistan hosted the 8th annual international exhibition and conference on the plastic, printing and packaging (PPP) industry, attracting hundreds of local and foreign companies. The organisers of the event say that the PPP industry has shown consistent growth over the past eight years.
“From the introduction of bulk packing bags for rice (of up to 500kg) to hygienically approved smart plastic containers for fish exports and an all round improvement in preservation techniques in packaging of fruits and vegetables have boosted exports of these items all around the world,” one of the organisers told Dawn. “Even movement of items of food exports from supply points to the ports now boasts of far better grading, packaging and logistics.”
Rising rural income levels and the recent increase in food export earnings have also encouraged food exporters to invest more in the technology and manpower used in the manufacturing and processing infrastructure. Small wonder that food exports now contribute about 18 per cent of total exports.
Another category of exports that has seen sharp growth is jewellery—, eightfold between FY07 and FY11—-, becoming the seventh largest foreign exchange earner in 2011.
And the skyrocketing price of gold in international markets is not the only reason - the Pakistan Gem and Jewellery Development Company also played a significant role in improving quality of products. In the past five years, it has set up training centres for jewellery makers in five cities besides establishing two assaying and hallmarking units—one in Karachi and the other in Lahore.
From FY07 to FY11, jewellery exports raked in $1.5 billion. So far for FY12 they have already earned just under $600 million, and have a good chance of achieving the projected $800 million.
A company official said “ in the last few years we have standardised the quality of exportable items and invested in technology and manpower to catch up with latest designing trends. We regularly hosted international jewellery fairs and even earned a name in the production of artificial jewellery.”
The export sectors of petroleum, chemicals and pharmaceuticals and cement have also done very well in the last four years.
Cement exports earnings have more than doubled during this period; chemicals and pharmaceuticals have recorded an increase of 135 per cent in value, and foreign exchange earnings of petroleum and coal sector have increased by 50 per cent.
Whereas rising trend in exports of cement and petroleum products can mostly be attributed to a large market for them in neighbouring Afghanistan, the increase in exports of chemical and pharmaceutical products has been achieved by deeper penetration of these products into a large part of the world including South and Central Asia, Far East, North Africa and the Middle East. Similarly, there have been increased exports of surgical goods and medical instruments mainly to the same regions.
“So on balance, exports have fared well despite uncertain international markets and domestic problems,” opines a former chairman of Pakistan Trade Development Authority.
“The missing links (in exports growth strategy) are few but too vital to be ignored. These are energy shortages, lack of close coordination between the government and the private sector and lack of official enough support for skill development and innovation in manufacturing and packaging.”