ISLAMABAD, April 25: Lack of compliance to international standards and endemic corruption in government departments are the potential impediments to the growth of exports in the country, reveals a United Nations Industrial Development Organisation (Unido) report.
The report “Trade related challenges facing exporters in Pakistan” launched here on Wednesday analyses the challenges pertaining to supply side, standards capacity and trading policy as it discusses the nature of barriers confronting Pakistani exporters and producers in accessing markets.
Chief of Research at Pakistan Institute of Development Economics (PIDE) Dr Musleh-ud-Din, discussing the salient features of the European Commission funded study, said though exports had increased during last five years, but maintaining the growth momentum remains a monumental challenge because of structural weaknesses in the industrial and exporting sector.
Currently valued at $16.5 billion, exports continue to remain concentrated in few markets.
Dr Musleh said the compliance to standards was the biggest hurdle in our exports. There is global demand for certification but the major disincentive for certification is lack of an internationally recognised testing laboratory in the country, he said adding that the exporters have to get certification from abroad that involves higher costs and delays in obtaining results.
Additionally, there is lack of awareness about the rules and regulations and potential benefits of compliance, particularly among smaller units.
The statistics show that predominantly the exporting units are ISO-9000 certified with 62 per cent textile units, leather 57 per cent, agro-processing 31 per cent; and fisheries 5 per cent.
Lesser units are ISO 14000 certified, but very few have certification for emerging standards like HACCP, SA 8000, OHSAS, EUREP-GAP and traceability.
When analysed from the perspective of the size of the firms, it transpired that larger firms are more compliant than the smaller ones for ISO-9000 and ISO 14000. None of the medium or smaller firms surveyed were complying with emerging standards.
The report says the firms that invest in standards related technologies exhibit significantly better export performance.
The supply capacity constraints have been broadly divided into technology aspects (packing materials and processes, production equipment, quality of inputs, labour skills and process controls and product specification); quality concerns (output quality and consistency, and product design); and management issues (on time deliveries and firm management).
Among the trade policy and facilitation concerns cited by the report corruption was far ahead of other constraints like freight, customs, market intelligence and tariffs.
On corruption the report specifically mentions customs as it says trade facilitation can be enhanced by streamlining customs procedures and taming corruption at customs.
Replying to a question Dr Musleh said the exporters during the survey said corruption was endemic in every government department – customs, excise and taxation, just to name a few. The report recommends streamlining of the role of commercial attaches and their appointment on merit on these positions.
Additionally, it calls for creating a conducive business environment through regulatory reforms; strengthening supply capacity; establishing standards conformity assessment infrastructure; and facilitating certification of management systems.
Speaking at the launching ceremony of the report, Federal Minister for Science and Technology Mr Nauraiz Shakoor said technical and regulatory barriers were being increasingly employed to block trade.
He said the proliferation and increased stringency of technical regulations and food safety and agricultural health standards are major source of concern among the developing countries.