Exports have picked up in the last eight months and the trend indicates that by the year end Pakistan would most likely cross the $10 billion mark for the first time in its history. This is happening at a time when, strangely enough, the rupee is getting stronger by the day against the dollar.

This is strange because according to the conventional wisdom drummed up by the IMF, exports go up only when you devalue your currency. On the basis of this misplaced wisdom, the Fund had kept forcing Pakistan over the last two decades or so to continuously depreciate its currency and the successive governments in the hope of increasing the exports followed the advise without questioning its wisdom. While this prescription of the Fund did not help enhance exports, it did, however, cause our foreign debt to increase proportionately.

Exports need exportable surpluses as well as markets to go up. Value addition is another factor which helps in bringing more foreign exchange. In the of absence of these factors no matter how much you devalue your currency, you end up with only an enhanced burden of foreign debt and no or an insignificant appreciation in exports.

Let us analyse the exports that have taken place over the last seven months. During this period exports of finished products rose by a hefty 18.55 per cent compared to the corresponding period of the previous year. The share of the manufactured items in the total exports of about $6.14 billion, however, seems to have declined to 90.55 per cent as compared to what was recorded in the same period in the previous year. This is attributed to an over 24 per cent jump in exports of primary commodities which contributed about 9.45 per cent to the overall exports— up 0.34 per cent from previous year.

As it is, nearly one-third of income from exports of textiles manufactures had come from the overseas sales of cotton yarn and coarse cloth—both being intermediate products carrying very little, if any, additional value. The aggregate export of these two items amounted to $1.28 billion , denoting an increase of 10.34 per cent over the corresponding period of last year.Moreover, cotton yarn was exported at a price of $57 a ton lower than what was the prevailing price in the previous year. But the lower prices did not discourage the exporters from increasing the quantity of export of these two items by 3.89 per cent.Among the finished products, bedwear emerged as the top earner amounting to nearly $700 million, which was 32.43 per cent more than what was earned last year in the same period from such exports. However, this increase in earning seems to have come by because of an 18.46 per cent increase in the quantity of exports of bedwear.

On the other hand, towels, tents, readymade garments and artificial silk and synthetic textiles fetched higher unit price and increased their dollar earnings by 20.19 per cent, 6.26 per cent, 24,.62 per cent and 23.84 per cent respectively. The only item which registered decrease in quantity was readymade garments. At $628.84 million the earnings from readymade garments closely followed the earnings from bedwear. In the caregory of other manufactuers, the contribution of tanned leather and leather manufactures was perhaps the highest at 32.04 per cent of a total earning of $1.14 billion .This caused the earnings from this category to show an increase of 8 per cent over what was earned from it in the same period last year. The earnings from tanned leather and leather manufactures amounted to $367.75 million down by about $11 million from previous year. Taken separately, the exports of tanned leather declined by 5.28 per cent and of leather manufactures by 1.61 per cent in dollar terms.

While exports of sports goods amounting to $166.85 million showed a growth of 13.04 per cent in value terms, the only group of products that showed some vitality included miscellaneous items.

Footwear with export earnings totalling $44.73 million registered an increase of 53.21 per cent, while surgical goods at $82.19 million and cutlery at $15.99 million increased by 10.94 per cent and 17.98 per cent respectively.

The chemicals and pharmaceutical product category exports earned $137.86 million showing an impressive increase of 77.25 per cent over what was earned from this category in the same period last year. The export earning from engineering goods amounted to a modest $37.78 million , but this was, however, 42.45 per cent more than its contribution during the same period last year.

Among the non-traditional items which are making their mark in export markets abroad are gems which fetched $1.19 million , jewellry ( $13.92 million ) and furniture ($4.78 million ). The molasses too earned a sizable amount of $21.47 million , but this was lower by 43.87 per cent compared to what was fetched from this item in the corresponding period last year.

The items marked as ‘others’ increased by 44.53 per cent to nearly $500 million . Thus their share in the total export rose to 8.04 per cent during the period under review as against 6.62 per cent for the corresponding period last year.

The total amount earned through the export of primary commodities during the period was estimated at $578.28 million. Almost half of this was accounted for by rice( $287.36 million ). Wheat export during this period amounted to $103.16 million ( 930,977 tons at the rate of $110.81 a ton). Exports of fruits moved up by 2.43 per cent earning an amount of $48.71 million.

As could be seen , in some cases the increase in earnings has taken place due to increase in the quantity and unit prices. This is perhaps the main reason why overall exports earnings this year appear to be better than what was earned in the same period last year despite the appreciation of the rupee vis-a-vis the dollar.

Another reason could be the increase in our textile quota by the European Union and greater market access accorded to Pakistan by the EU. It was due to these concessions that Pakistan’s export to EU member countries stood at $2.503 billion during the financial year 2001-02 against $2.420 billion in 2000-01.But this has to be established clearly before one could come to a firm conclusion why the exports are going up at a time when the world market continues to stagnate.

While Pakistan has succeeded in getting greater market access in EU, we continue to be denied a proportionately greater access to the US and Japanese markets. Efforts, therefore, need to be made in this direction in order to sustain the growth of exports which if seen against the backdrop of the trends discussed above are likely to start stagnating after a couple of years.