There is a good news that Pakistan’s exports of goods have witnessed an increase of 33.09 percent in rupee terms during the first three quarters of the current fiscal year compared to the same period last year. As reported by the Pakistan Bureau of Statistics (PBS), the main commodities of exports during March, 2022 were knitwear (Rs. 76,350 million), readymade garments (Rs. 61,937 million), bed wear (Rs. 46,869 million), cotton cloth (Rs. 37,732 million), rice others (Rs. 33,981 million), towels (Rs. 18,483 million), cotton yarn (Rs. 16,594 million), made up articles, excluding towels & Bedwear (Rs. 12,669 million), rice Basmati (Rs. 11,463 million) and petroleum products (Rs. 8,148 million). Among these commodities, textile remained one of the area where the exports have increased significantly. Undoubtedly, it is good development and in order to keep the trend upward, the government needs to give more incentives to the exporters of the country. While it may be a moment to rejoice for the exporters, however, looked at from a holistic perspective, it betrays a fundamental flaw with the over-arching policy of the country’s exports; the costly electricity. The exports industry, by and large, has been suffering from the monstrous price of electricity provided to the industrial sector which jacks up the costs of manufacturing goods. By the time the end product comes out of the factories, it already is cumbered with an exorbitant cost, making it more expensive for the consumers within the country and importers without, making indigenous products highly undesirable. The goods coming out of China, for example, leave the Pakistani products in their wake due to their low costs. Pakistan, despite its proverbial abundant natural resources, has a tremendous cost of electricity.
The statistics are harrowing if the cost of labor is taken into perspective. The minimum wages of workers in Pakistan, as things currently stand, are amongst the lowest in the world. Globally, China has been able to send the US job market into a meltdown by making US companies outsource their manufacturing to China due to the cheap labor available there.
While conditions for Pakistani wage workers are similar to, if not worse than, those in China; the volume of Pakistani exports is still incomparably low. Apart from the poorly skilled labor available in Pakistan, the single most significant factor in this difference is the cost of manufacturing goods. The government needs to decrease the price of electricity to fully utilize export potential of the country. It is also a fact that Pakistan is a donor/aid dependent country. However, what never ceases to amaze is the fact that we do not put any effort into being anything but that, into reforming our economic system in such a way that we can tuck away our begging bowl and hold our heads up high. The government needs to invest money on setting up more industries. It should hire young talented people who can set up local automobile, mobile phone, medical, aviation industries and invest money on locally made products.
When the export will rise, we can get rid of the IMF debt.
