ECC defers approval of STPF 2020-25

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has deferred the approval of the Strategic Trade Policy Framework (STPF) for 2020-25 for the third time.

In this regard, Federal Minister for Finance and Revenue, Shaukat Tarin, chaired the ECC meeting through a video link.

Sources said that the Ministry of Commerce presented the summary regarding the STPF to enhance export competitiveness of Pakistan through a framework of policy interventions. 

The proposed policy framework also includes a monitoring and implementation mechanism while the underlying rationale is to enhance exports as a national priority through collaborative and cohesive efforts.

The MoC has proposed three scenarios such as no major change in competitiveness, improvement in competitiveness and further improvement competitiveness pertaining to setting export targets in the five year proposed policy. 

The ministry has proposed a $29.10 billion export target under the third scenario for 2021-22 (FY22), $32.98 billion 2022-23 (FY23), $36.26 2023-24 (FY24), and $40.27 in 2024-25 (FY25).

In addition, the ministry has proposed Rs76.72 billion finance outlay of five year proposed SFTP that consist of competitive enhancement, integration into global value chain and export ecosystem.

Sources said that the SBP and FBR, in a meeting held in March, had raised observations pertaining to a market-based realistic exchange rate as well as revision of export target, and that MoC has addressed all the observations of departments.

As per a handout issued by the Finance Ministry, the finance minister directed the ministry to incorporate all the factors related to a market-based realistic exchange rate under the proposed STPF 2020-25.

He further stressed to include specific measures for encouraging Foreign Direct Investment (FDI) and consolidation of the fragmented export industry in Pakistan. 

After due deliberations, the committee decided to review the draft STPF 2020-25 after having another consultative meeting with all relevant stakeholders and present an updated policy framework before the next ECC for approval.

The Ministry of National Food Security and Research (NFS&R) presented a summary regarding intervention price for the cotton crop for FY22. 

The ECC had earlier constituted a committee, under the chairmanship of the Minister for NFS&R, for presenting recommendations to promote cotton production and bring price stability in the domestic market by monitoring local market prices. 

The ECC deliberated over the recommendations by the Cotton Price Review Committee (CPRC) and it was decided that another consultative session would be held with all key stakeholders on board including M/O NFS&R, Finance Division and Commerce to finalise the recommendations and present the revised summary before Cabinet.

The Finance Division tabled a summary to carry forward for FY22, the non-utilised cash component equal to Rs352 billion out of the economic stimulus package amounting to Rs1,240 billion that was given in March 2020 to mitigate the adverse socioeconomic impact of the coronavirus pandemic and to support the marginalised sections of the society. 

The funds were allocated under the package for the entire duration of the Covid-19 pandemic irrespective of the financial year.

Foregoing in view, the ECC again validated the amount of Rs352 billion for FY22 to meet related expenditures, including procurement of the Covid-19 vaccine during the ongoing fourth wave as the federal government aims to vaccinate at least 85 million by December.