Reforms carried out by Razak Dawood led to many achievements in export promotion, trade balance and digitalization of various sectors
ISLAMABAD: Reforms carried out by Commerce Division under supervision of Advisor to PM on Commerce Mr. Razak Dawood during last six months have led to many achievements in export promotion, trade balance and digitalization of various sectors.
Under leadership of Prime Minister Imran Khan, the Commerce Division remains dedicated to foster collective economic growth in the country, by harnessing the untapped potential of resources, industries, and individuals for the development and promotion of Pakistan’s exports of goods and services and to attract foreign investment and improve business indicators.
The Commerce Division introduced several institutions reforms including TDAP restructuring along sectoral lines, transformation of PHDEC from a dormant entity to into a vibrant public-sector business support organization, transfer of three insurance companies including NICL, SLIC and PRCL to Sarmaya Pakistan, initiation of process for transfer of PIFD to Ministry of Federal Education and Professional Training, creation of Tariff Policy Centre at National Tariff Commission, selection of 46 Trade Officers, including Pakistan’s ambassador at WTO, through a transparent merit-based system, initiation of filling positions of CEOs of attached organizations through a transparent process and adopting of ERP-SAP Business One Module by TCP for automated accounting, financial management, budgeting, inventory and human resource management.
For rationalising imports the Commerce Division has imposed regulatory duties on non-essential items, implemented SPS requirements on food items, introduced labelling requirements for food items and implemented traceability mechanism to curb misuse of used cars import policy.
The Commerce Division has introduced several policy reforms during last six months including: formulation of first-ever e-commerce policy of Pakistan, preparation of draft National Tariff Policy for submitting to the Cabinet for approval, simplification of procedures of disbursements under DLTL, introduction of ‘Safety Health and Procedural Requirements’ for import of food items, improvement in policy for import of arms and ammunition, development of policy safeguards for export of ethanol to check undocumented sourcing of molasses and implementation of standards regime on solar panels and introduction of procedure for import of photovoltaic cells.
In order to enable Pakistan’s manufacturing industry to compete in the international markets, with the goal of boosting exports and creating jobs, Commerce Division has completed work on a National Tariff Policy. Tariff reforms include: removal of customs duty on 1635 tariff lines of raw materials in Budget 2019-20, preparation of National Tariff Policy to remove anti-export bias and initiation of comprehensive tariff reform exercise at National Tariff Commission.
The Commerce Division has introduced several legal reforms during last six months including: approval of Geographical Indications (GI) Law by the Cabinet and submission to the Parliament, preparation of Import Policy Order 2019 and Export Policy Order 2019 replacing orders of 2016.
The Commerce Ministry has taken several steps to increase exports of the country. It organized first-ever dedicated show by Italian designer Stella Jean on Pakistan at the Milan Fashion Week, showcasing embroidery done by the women of Chilas, Chitral, Hunza and truck art of Pakistan on western clothing, participation in around 150 trade fairs/exhibitions abroad, development of effective strategy for export of dates to clear the glut in the wake of India imposition of 200% duty on Pakistani dates, organized Trade and Investment Conferences in Beijing (twice), Shanghai, Tokyo, Seoul to showcase trade and investment potential of Pakistan where leading Pakistani manufacturers and exporters participated in the conferences for B2B meetings. TDAP organized ‘Texpo Pakistan’ – the largest sourcing event for Pakistani textiles and fabrics. The event was attended by delegates of over 52 countries.
The Commerce Division has adopted several diplomatic channels to increase exports of the country during last six months including: conclusion of Phase-II of Pak-China FTA providing duty free access to Pakistan on 90% of China’s global imports, notification of unilateral duty concession by Indonesia on 20 import items from Pakistan, removal of ban on import of Pakistani rice by Qatar, securing $1 billion package from China for export of rice, sugar and cotton yarn at zero duty, strengthening safeguard measures to protect domestic industry from import surge from China. TCP facilitated export 300,000 MT-F 1st time ever sugar export to China.
Pakistan’s exports during the period August-October 2018 stood at US$ 5.65 billion compared with US$ 5.4 billion during the corresponding period of 2017. It reflects a 4.4% increase in dollar terms and 25% in rupee terms. In absolute terms the exports earned US$ 240 million more than the corresponding period of last year.
The positive trend in exports was generated by the policy intervention of the new government:
(i) rationalization of exchange rate
(ii) decrease in tariffs of raw materials & intermediate goods
(iii) supply of gas to the zero rated industry at lower cost,
(iv) continuation of the export package, and;
(v) release of sales tax refunds.
During the first 100 days of the new government, the increase in imports was arrested. There was insignificant increase of 0.1% in imports during Aug-Oct 2018 compared with previous year, mainly due to exchange rate rationalization, and increase of regulatory duties on non-essential imports. Due to the increase in exports & stagnation in imports, Pakistan’s trade balance is improved by 3% during Aug-October 2018 compared with previous year.
After all of these measures taken by the Commerce Ministry, the government succeeded to make huge achievements including: improvement in trade balance by 15.3% in FY2019 and 34% in first quarter of FY 2020, import compression by $6 billion in FY 2019 and $2.8 billion in first quarter FY2020, inclusion of EoDB-Pakistan by World Bank in top 20 reformers, record export of mangoes in FY2019 with 42% increase, record export of rice showing 50% increase in the first quarter, exports of cotton t-shirts increased by 58% in first quarter of the financial year, implementation of Electronic Data Exchange to check mis-declarations of imports from China, export market diversification through opening of 6 new commercial sections in Africa and 2 in South America, organizing of British Backpackers visit to Pakistan, which led to positive support to increasing tourist inflow to Pakistan this summer, digitalization of Rice Quality Certification process to minimize personal contact between TCP official and exporters. TCP contributed towards Prime Minister’s Green Pakistan Scheme by planting 700,000 plants through an innovative technique called ‘TCP Seed Ball Campaign’. TCP imported 200,000MT urea to meet the domestic need and TCP also paid dividend of Rs 200 million to the federal government.
Commerce Division has developed a draft Trade Related Investment Promotion Strategy (TRIPS) in consultation with the stakeholders. TRIPS aims to channelize investment into export-oriented production and competitive import substitution. The framework seeks the following direction for investment related measures: identify the priority sectors for seeking investment in the manufacturing sector; identify the critical enablers for attracting trade related investment, provide the policy measures under the investment enablers in the priority sectors, and devise strategy for investment promotion and implementation of the policy.
The commerce division has 58 trade officers in 42 countries in Pakistan’s mission abroad. The geo-strategic environment has changed considerably and there is a need to attune Pakistan’s Trade Offices to deal with present and future challenges. In view of the above, Commerce Division has prepared a comprehensive proposal for reform of these Trade Offices.
The Commerce Division is constantly endeavoring to improve the performance of its Trade Officers (TOs) posted in Pakistan’s Missions abroad. KPI’s have been developed and trade officers monitoring & evaluation committee is constantly supervising their performance. This is based upon retention of well-performing personnel while recalling the ones found to be “Below Average” performers.
Commerce Division has planned to establish Expo Centres in all major cities of the country. Two Expo Centers are already operational, one each at Karachi and Lahore. Expo Centre Peshawar building is under construction at present. As a result of continuous persuasion by Commerce Division, the Government of Balochistan has recently leased a 50 acres piece of land situated at Quetta Industrial & Trading Estate, Phase-III Eastern Bypass Quetta, for construction of Expo Centre Quetta for which PC-I is under process. At Karachi Expo Centre, as the present exhibition space is not sufficient to meet the market demand, Commerce Division plans to completely remodel the entire infrastructure and construct nine new halls, a Convention Centre, multi-story parking and an I.T. tower/office complex.