THIS refers to the news item ‘Exports cross $2bn mark for fourth consecutive month’ (Feb 2). The government is upbeat about the export earnings having remained above $2 billion for the last few months. However, the picture is not so rosy and it does not tell the whole story. The export proceeds during July 2020 to January 2021 were worth $14.2 billion compared to $13.5 billion in the same period in the preceding year, which works out to a paltry rise of $0.7 billion.

With the trend, the country may end the year with earnings of $24-25 billion. The highest export proceeds were $25 billion during the PPP government. So, the country may not cross the level achieved eight to nine years ago in the current year.

The exporters are being offered huge subsidies and concessions despite a cheaper rupee. But the dollar remittances against exports are not commensurate with the volume owing to under-invoicing, which is estimated at nearly 50 per cent.

The prices shown in export documents are much below the cost so that the full price is not repatriated. This is the precise reason for Pakistan having a low export base of $110 per capita compared to $230 for Bangladesh and $410 for India.

According to estimates, the actual exports in the region are worth $40-50 billion annually, but only half of it is repatriated officially.

In essence, the export sector has become a conduit for money-laundering. Non-repatriation of full dollar proceeds is tantamount to illegal transfer of money.

Some non-exporters have also entered the export trade to use the channel for transfer of money abroad. Certain exporters have set up their own offices abroad for facilitating such transfers.

Instead of feeling elated on the export performance, the commerce minister, who is himself a businessman, should pay serious attention to the robbing of Pakistan’s wealth by unscrupulous elements by misusing export route.

Erum A. Baig

Karachi

Published in Dawn, February 12th, 2021