The World Bank has reported that Pakistan’s export sector is performing well below its potential. According to the report, the country’s exports are $60 billion short of what they could achieve. The findings highlight the need for urgent reforms to strengthen trade competitiveness and stimulate economic growth.
The report notes that Pakistan’s share of exports in GDP has declined from 16% to 10%. Factors contributing to this drop include rigid business regulations, inflexible exchange rates, and high costs for energy and logistics. These structural barriers prevent the country from fully benefiting from global trade opportunities.
Recommendations for Improving Exports
The World Bank recommends adopting a flexible exchange rate system to enhance export competitiveness. It also suggests simplifying business laws and regulatory frameworks, which currently hinder trade expansion.
The report emphasizes the activation of the Exim Bank of Pakistan. Providing the bank with modern export financing mechanisms could support local exporters and improve access to global markets.
Structural Challenges and Institutional Issues
Over 200 government institutions influence private sector operations, creating inefficiencies and bureaucratic delays. Restrictions on profit repatriation, high electricity tariffs, and weak logistics infrastructure further increase production costs compared to regional competitors.
The World Bank stresses the importance of implementing tariff reforms, modernizing the Federal Board of Revenue (FBR), and upgrading customs systems to facilitate smoother trade operations.
Additionally, the report encourages Pakistan to explore non-traditional export markets in Africa and Latin America, where untapped opportunities could diversify the country’s trade portfolio.
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In conclusion, the World Bank asserts that addressing these structural and institutional barriers is critical. By implementing the recommended reforms, Pakistan can unlock its export potential, boost foreign earnings, and promote sustainable economic growth.
