EARLIER, the Export Promotion Bureau (EPB) had plans to attain a gradual growth of exports to $11.5 billion by the fiscal year 2002 and $14.1 billion by 03.

During the year 2001-02, however, the country’s exports totalled only $9.12 billion as compared to exports of $9.143 billion achieved during 2000-01. In fact, exports remained stagnant at this level for many years though successive governments adopted various measures to increase exports.

The targets for the year 2002-03 have been revised, now fixed at $10.5 billion. During the first five months i.e. July to November 02 our exports amounted to $4.329 billion, and it may not be possible, once again, to achieve the annual target. Pakistan continues to rely heavily on exports of traditional items, like cotton, rice, textiles, which are dependent on the conditions of agricultural crops. Thus, in order to increase exports, the EPB has to work out earnestly a multi-pronged strategy focusing on diversification of exports in terms of products and value-addition as well as the markets. The strategy has to be directed towards exploitation of the potential that exists in non-traditional sectors and remains untapped so far.

Engineering goods are of great significance amongst non- traditional items, and offers promising prospects for exports, given due recognition. Not only the newly industrialized countries but also even the developing nations such as Malaysia, Thailand and Indonesia have based their export strategy on the strengthening of engineering sector. Alike, Pakistan has developed a fairly wide base for production of engineering goods including capital machinery. The range of engineering goods covers industrial plants, ships, railway equipment, small aircraft, electrical goods, transport equipment, domestic appliances, telecommunication equipment etc. There are about 2,000 registered units and a much larger number in the unorganized sector, with fixed assets of over Rs 100 billion.

The Heavy Mechanical Complex, the Karachi Shipyard and Engineering Works, the Pakistan Machine Tool Factory, the Heavy Electrical Complex and a number of defence industrial units are operating in public sector. Major private sector units are Siemens, KSB Pumps, Descon, Millet Tractors and Ittefaq Group. A number of small industrial units are operating in Karachi, Lahore, Gujrat, Gujranwala and Sialkot.

Pakistan Steel is a huge engineering complex producing various steel products. Automobile industry is very well developed, and manufactures cars, buses, trucks, and motorcycles etc. A quality conscious vendor industry has also been created. The industry provides employment to over 6(: 0,000 persons. Proper skills and high quality manpower is available. Implementation of ISO 9000 has been undertaken in major industrial units whereas ISO 14000 is being introduced.

Engineering goods have already made a breakthrough in the export market. In addition to conventional exports of surgical instruments, cutlery goods, fans and other light engineering products, complete sugar mills have been exported to Bangladesh and Indonesia and ships to China. Machinery, equipment and spares for sugar, cement and textile industries, and a large number of mechanical and electrical engineering and transport goods including buses and tractors have been supplied to various countries. These products conform to international standards of quality. Pakistani companies, such as NESPAK, have also provided technical and engineering consultancy services related to various industrial and infrastructure projects abroad.

The export performance of engineering sector however has remained dismal in past years, even less than 2 per cent of the total exports. The industry has not been able to export the engineering goods on a sustained and substantial scale. A number of factors can be attributed to the situation. One of the main issues is the lack of institutional support for sales and marketing of engineering goods, as it is not subject to usual methods employed for consumer items. In the highly competitive and fast moving environments globally, the engineering industry could not operate effectively in export markets.

It is recognised that capital machinery, light engineering goods and engineering consultancy services offer great opportunities for export mainly in the Middle Eastern, African and neighbouring countries. Nonetheless, it presents numerous challenges and difficulties too, given the present national and international environments. To bring about a real change, drastic measures are to be adopted, with well-thought out, sustained and coordinated focus on export promotion of engineering goods and services. Simply setting its export target of one billion dollars by the year 2005 under the recently announced ‘Engineering Vision’ would be meaningless.

The need of the times is to develop a long-term vision in the direction of attaining the results too. To achieve the EPB’s targets, in the coming years, it is considered imperative to set up an autonomous body exclusively for the export promotion of engineering goods and engineering services, on the pattern of recently established Defence Export Promotion Organization (DECO), with the involvement and participation of all stockholders. The proposed body may undertake:

(i) to develop a long term vision for the promotion of export of engineering goods and services catering to the needs of the international markets;

(ii) to speedily increase exports and to explore new markets related to the engineering goods and services;

(iii) to strengthen and widen export base, both in direction and in products, with a view to achieve international competitiveness;

(iv) to examine sector specific problems at micro level, to identify factors that hinder exports, and to remove impediments;

(v) to co-ordinate existing resources of design, engineering, manufacturing, technical services and human resources, in the public and private sectors;

(vi) to serve as the key resource base for engineering industry, and export of related products and services.

It is therefore proposed to establish an ‘engineering export promotion council’, within the administrative and financial resources of the EPB. The measure will facilitate in institutionalizing the public-private collaboration to substantially enhance exports related to engineering sector, and to undertake greater promotional activities in the direction towards achieving export-led economic growth. The council may predominantly be run by the initiative of the private sector, of course, with the active participation of the key public sector industries and government functionaries.

The proposed measure is aimed at (a) increasing the flow of foreign exchange volume, (b) improving the present position of balance of payments, and (c) creating additional employment opportunities. Resultantly, it would help stimulating the national economy. Similar organizations are operative in other developing countries, like India and Indonesia, having successfully promoting export of their engineering goods to various markets.