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Pakistan sets $95b export target for 3 years
Publication Date : 31-01-2013
The Pakistan government yesterday unveiled a medium-term (2012-15) Strategic Trade Policy Framework, setting a cumulative export target of US$95 billion for three years.
The framework, the second announced by the current government, will be implemented with a funding of 26.14 billion rupees ($267.71 million).
In the first year, 5 billion rupees will be spent on providing subsidies and support to identified sectors. Only five months are left in the current fiscal year.
The focus of the policy is on promoting regional trade and regulatory efficiency, promoting agro-processed exports, increasing exports from less developed regions, revamping export promotion agencies, increasing green exports, enhancing role of women in exports and pursuing product and market development and diversification.
The salient features of the policy include institutional interventions, export development initiatives and regulatory amendments.
The policy, approved at a cabinet meeting presided over by Prime Minister Raja Pervez Ashraf, offers cash assistance to 14 sectors along with 19 regulatory frameworks, including ban on products as a protective measure against environmental and health hazards.
The trade policy framework for 2009-12 had failed because of lack of funds and the finance ministry has hinted at providing around Rs10bn for the new policy in three years if the economy performs well.
The new framework is designed to provide assistance only to the non-textile sectors.
Unlike in the past, the commerce ministry has ignored the provinces while preparing the framework, although they would have a major role in implementing it.
Representatives of chambers and associations were consulted but the policy was worked out by officials of the ministry.
The government will set up institutions like an Export-Import (Exim) Bank, Pakistan Land Port Authority; Leather Export Promotion Council and a Services Trade Development Council.
A committee has been formed to prepare a report on the establishment of the Exim Bank within three months in consultation with the State Bank.
Major initiatives in the policy include allowing mark-up rate support of two per cent on prevailing LTFF for future import and purchase of machinery.
An allocation of Rs500 million has been proposed for schemes to be implemented this year. The total amount to be spent in three years is projected at 3 billion rupees.
A mark-up support of 1.5 per cent will be provided on export finance scheme (EFS) to selected sectors at a cost of 1.25 billion rupees, including 200 million rupees in 2012-13.
The sectors for EFS support are: fish and fish preparations, fruit and vegetables, spices, meat and meat preparations, carpets and rugs, sports goods, footwear, leather products, surgical goods, cutlery, onyx products, pharmaceuticals, electric fans, transport equipment, electrical machinery, specialised machinery, furniture, handicrafts and computer-related services.
An amount of 14 billion rupees will be given as ad hoc relief at three per cent of FoB to offset the impact of higher cost of utilities for exporters in selected sectors. The measure will cost 3 billion rupees this year.
An amount of 2 billion rupees—125 million rupees this year—will be allocated for marketing development assistance for regional countries.
A 25 million rupees allocation has been proposed for export promotion campaigns for agro-processed products; 400 million rupees for encouraging opening of retail outlets; and 400 million rupees for subsidising 50 per cent cost of plant and machinery for establishing processing plants for meat, fruits, vegetables, dates and olives in Azad Jammu and Kashmir, Balochistan, Gilgit-Baltistan and Khyber Pakhtunkhwa.
An amount of 30 million rupees will be allocated for upgrading rice inspection laboratories, 20 million rupees for subsidy at 100 per cent of the prevailing mark-up rate for establishing mining and processing units in Khyber Pakhtunkhwa and Balochistan.
Another 20 million rupees has been allocated for strengthening women’s chamber of commerce and industry, 32 million rupees for setting up a resource management cell at the ministry of commerce, 28 million rupees for establishing leather export promotion council and 70 million rupees for services export development council.
The import of auto pilot circuits has been restricted to authorised agencies.
Unrestricted import of used motorised wheelchairs and five-year-old used or second-hand ambulances has been allowed.
Two per cent of export proceeds will be allowed to manufacturers-cum-exporters for duty-free import of accessories for value-addition for leather garments and made-ups.
Import of non-hazardous plastic scrap has been allowed for industrial consumers for use as raw material.
A ban has been imposed on import of plastic waste, hospital waste, used sewerage pipes and chemical containers.
Import of non-sterilised surgical needles and syringes will be restricted to industrial units; condition of Euro-II may be made applicable on import of all types of specialised vehicles, such as crane-mounted lorries, dump trucks and mixture lorries.
The import of used sprinkle lorries will be restricted to a maximum of five years old.
All goods from banned list imported in commercial quality shall be allowed re-export at importer/shipping lines’ cost.
The imported substandard goods from the restricted list should be destroyed within a period of six months without offering any release.
Import of waste and scrap of tyres in completely shredded/cut form will only be allowed to industrial consumers; domestic standards will equally apply to imported goods as well.
Construction, engineering and electrical companies will be allowed to retain abroad the exported machinery to carry out work on export-cum-import basis with the condition that they will import the same on the conclusion of the contract against indemnity bond.
All exporters of edible products are to be registered and export of vegetable ghee and cooking oil will be allowed in packaging of up to 25kg to encourage value-addition.
*US$1= 97.64 rupees