LAHORE, Jan 27: Commerce Minister Humayun Akhtar Khan on Monday expressed his concern over Pakistan’s very low volume of trade with the regional countries, saying the regional trade needed to be improved in the changing world business environment.

“We should increase regional trade because it is the demand of the changing world business environment. We should focus on South Asia, Central Asia, Middle East and even Africa,” he told traders and industrialists at the Lahore Chamber of Commerce and Industry (LCCI).

Pakistan exports about 66 per cent of its goods to the US, the EU and Middle East and the remainder to the rest of the world.

The minister said “it was not that Pakistan did not trade with India, the quantity was very low”. “While with other countries we start with a negative list of items which could not be traded, it is opposite in case of India with whom we have a positive list of items (of 1,600 that be traded between the two neighbours),” he added.

He was, however, hopeful that the member nations of South Asia Association for Regional Cooperation (Saarc) would sign the South Asia Preferential Trade Agreement (Sapta), that would lead to the South Asia Free Trade Agreement (Safta), during or after the next Saarc summit.

He also stressed the need for devising a mechanism to counter trade barriers like imposition of anti-dumping duties initiated against Pakistan from time to time. “We must effectively counter these actions against our exports and exporters,” he added.

Urging businessmen to increase their exports, the minister promised to take measures for removing all snags in the way of doing business, slashing cost of inputs and providing all facilities to help them in this respect.

He said Pakistan’s exports had gone up to $9.2 billion from $160 million in 1960 as compared to Malaysia’s $88.5 billion from $1.25 billion and China’s $266 billion from $2.75 billion during the same period.

He said he would apprise the prime minister of their problems, proposing that an inter-ministerial committee (that deal with the business and industry) also having private sector representatives on it should be constituted for an “early sorting out of problems facing the manufacturers, traders, and exporters”.

He was also sorry to note the deplorably low level of (foreign and local) investment in the country. He said around $1.4 billion had been invested in the country’s textile industry in last three years. “No money has been invested in other sectors. The increase in the stock exchange index is although encouraging, no new issue has been listed.”

He stressed the need for increasing productivity by investing in research and development, human resource, and technology for boosting the country’s exports. He said the government would give a few incentives like tax breaks for this very purpose but warned the businessmen not to “rely too much on the government support”. The exporters would be unable to compete in the international markets in a quota-free environment after enforcement of the WTO regime. “You will have to become competitive and efficient.”

Humayun was pleased to note that the cost of credit was coming down as a result of the central bank’s policies. But, he added, a lot more was needed to be done to further slash the rates so that it becomes economically viable for the businessmen to secure loans for expanding their business. He said the current spread of about 8-10 per cent between the banks’ deposit rates and cost of credit was too wide. It needed to be narrowed down to 2-3 per cent.

He was hopeful that the removal of anomalies and problems from the DTRE scheme would make exports actually zero rated. Further, he said, the government was considering to set up two special export zones in Karachi and Pindi Bhattian because, in his view, the export processing zones (EPZs) had failed to deliver in the past. The government would provide all infrastructure needed to boost the industry and transfer it to the private sector for managing it, he said.

He said he was opposed to government subsidies but added that some mechanism should be devised in order to help such industries as fertilizers and cement which use local raw materials to enter the export market.

He also urged the business community to develop their brands. “Brand names sell. If you can’t develop your own brand, buy one (in the international market),” the minister said.