Pakistan’s Export Potential and Economic Prosperity

Hassan Abdullah Rasool

14 May 2024

In today’s interlocked global economy, the expansion of export markets has become more than just a strategic choice for businesses, it’s a critical imperative for sustained growth and competitiveness. As nations strive to diversify their economies and capitalize on comparative advantages, the significance of exports as drivers of economic prosperity cannot be overstated. From small enterprises to multinational corporations, the ability to tap into international markets not only fuels revenue but also contribute in innovation, strengthens supply chains, and enhances overall flexibility against economic unpredictability.

Pakistan blessed with ample natural resources, a skilled workforce, and strategic geographical positioning, the country holds enormous potential to become a key exporter on international level. However, despite these advantages, Pakistan’s export sector has faced numerous challenges, hampering its ability to fully capitalize on its strengths. Collaborative efforts from both public and private sectors, Pakistan can mobilize its unexploited export potential to drive economic development, create employment opportunities and enhance its global competitiveness.

According to Pakistan Bureau of Statistics 2023 data, the main exported commodities were knitwear, readymade garments, bed wear, cotton cloth, cotton Yarn, towels, rice others, rice Basmati, made-up articles (excluding towels & bedwear), Surgical goods & medical instruments.

There is seen boost in exports of Pakistan due to Special Investment Facilitation Council (SIFC) efforts, according to 2023-2024 exports of agro and food products has increased by 64%. The current fiscal year has also seen increase in exports of sesame seed, maize/corn, ethyl alcohol, meat, rice, fruits, vegetables, spices and tobacco. Under same efforts there is seen 17% rose in information technology exports which has reached to $303 million in December 2023 and it is expected that IT industry exports will reach to $10 billion over next three years. According to State Bank of Pakistan’s (SBP) data Pakistan’s regional exports rise by 20.6%, countries included Afghanistan, China, Bangladesh, Sri Lanka, India, Nepal and the Maldives.

With every potential available Pakistan’s exports performance have been not up to mark comparing with other countries like Bangladesh, China, India, Vietnam and Turkey who all have done great in promoting their exports.

Poor export performance is playing its role in widening trade deficit of Pakistan, due to same reason export is very less contributing in the overall GDP of Pakistan. Due to less activity in exports sector it is mounting different challenges like current account deficit, burden on foreign debt, exchange rate and many other macro-economic problems.

There are different reasons that is poorly affecting the performance of Pakistan’s exports and those key factors includes real exchange rate, low productivity of firms, lack of export competitiveness and diversification, lack of value addition, less or no Research and Development (R&D) at every level, less or no access of firms to global markets and high import duties act as export taxes, these are few of the factors that are adding into poor performance of exports sector. Other factors that are also negatively affecting export performance are infrastructure bottlenecks, energy shortages, bureaucratic hurdles, lack of innovation and technology adoption, economic uncertainties, trade barriers and geopolitical tensions are also mounting pressure on exports growth.

To embrace digital transformation, to invest in human capital, to provide business environment, to enhance export competitiveness, to promote export-oriented industries, to make easy laws for doing business, to collaborate between government, private sectors and academia regarding Research & Development (R&D) and to address structural deficiencies will positively affect exports performance of Pakistan.

Exports play an important role in economic growth, enhancing global competitiveness and strengthening of international relations, Pakistan has all the abilities to come up as the player in global markets and to achieve this goal authority needs to counter challenges, do concerted efforts, give innovation solutions and be firm on commitment, will play role to transform Pakistan’s economy as export-led economy, that will directly benefit overall economy and it will solve many of the economic issues of Pakistan.