ITC: Pakistan’s exports may rise by up to $12bn by 2024

The ITC report identifies the most challenging non-tariff measures that Pakistani businesses face.

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Although the country’s exports are expected to face the impact of the coronavirus in the current fiscal year, the International Trade Centre’s latest export potential assessment for Pakistan sees the country’s exports rising by up to $12 billion by 2024.

“More than half of Pakistani exporters struggle with domestic and foreign regulatory barriers,” said Invisible Barriers to Trade – Pakistan 2020: Business Perspectives. The report was prepared in collaboration with the World Bank Group’s country office in Pakistan.

The report, which is based on a survey of 1,152 importers and exporters, identifies the toughest trade hurdles that are  facing Pakistani businesses. It gives policymakers an insight into which policies, procedures, and facilities must be strengthened to reduce trade costs and boost competitiveness.

“Almost half of these hurdles are homegrown, which means the government has the ability to fix many of the problems holding back its exporters, the report stated. It further  suggested ways for the government and the private sector to crank up competitiveness by addressing issues such as export inspections, tax refunds, and export certification.

The ITC report identifies the most challenging non-tariff measures that Pakistani businesses face. Among these are difficulties complying with technical requirements, lack of trade-related information, and inadequate domestic infrastructure.

Women entrepreneurs also face social constraints and a general lack of sufficient support in government agencies and business support institutions.

The NTM Business Survey in Pakistan finds that 49pc of small enterprises and 57pc of medium-sized firms have trouble with non-tariff measures, while 54pc of large companies consider them to be burdensome.

Almost half of the challenges these firms reported stem from Pakistani rules on matters such as export inspections, tax refunds, and export certification. These invisible barriers to trade, affect exporters and importers differently, and their impact varies across sectors.

The most important ones are slow processes on the necessary paperwork and high fees and charges to obtain the required certification or testing. Informal payments and inadequate facilities for testing and certification in Pakistan were also frequently reported.

As a way forward, the survey identifies numerous challenges, especially regarding export-quality management and infrastructure in the country. Improving quality infrastructure and enforcing quality compliance are key to export development.  For instance, Pakistan should increase the capacity of local laboratories to carry out required testing and certification.

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