- Pakistan’s competitiveness in global market consistently sliding during past four years
Though the world economies continue trying to improve their trading and business environment as per international best practices, Pakistan has been losing its competitiveness consistently during the past four years, a report of the Ministry of Commerce (MoC) claims.
According to a write-up presented to the ministry recently, the emergence of international competitiveness frameworks has been influential in pinpointing a wide range of stumbling blocks to trade. These frameworks help trade policy reformers to assess the trading and business environment of their country against international best practices.
However, in the case of Pakistan, it was observed that over the last four years Pakistan has been consistently sliding down in terms of international competitiveness frameworks.
As per the Global Competitiveness Index, which comprises of 12 pillars, it was no accident that countries which were higher up in the ranking of these indices were also the ones doing well in terms of their share in global exports. But the state of affairs prevalent in Pakistan is different, wherein a substantial and alarming slide in all indices was witnessed in the last four years.
Although, Pakistan’s exports had been doubled in a six-year period between the years 2001-02 and 2007-08 i.e. from $ 9.1 billion to $ 19 billion, but during the last six years, exports have remained range bound between $ 19 billion and $ 24 billion; only recently in the year 2013-14, for the first time in Pakistan’s history, they had crossed the $ 25 billion mark.
The reforms carried out during the last two decades have not yielded the desired results. Exports are still concentrated in few markets and few product categories. At a time when many developing countries are rapidly expanding their exports, Pakistan continues to struggle to accelerate the export of manufactured goods. It is generally believed that the country’s exports are not competitive in international markets; therefore it is unable to expand its market share. In particular, firms often complain of the lack of an investment-conducive climate, which impedes business expansion and exports.
In order for Pakistan to be export competitive among countries with similar resource endowments, a range of supporting domestic policies is required. It has been unable to realise its full potential of export-led growth. During the last 20 years, Pakistan’s share in global exports has consistently been less than 0.25pc while countries with even fewer resource endowments like Vietnam and Bangladesh have overtaken it.
