KARACHI /DNA/ – The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel Chairman Mian Anjum Nisar has warned of far higher trade deficit at the end of the current fiscal year 2021-22 than the targeted deficit of $28.4 billion fixed by the government, as trade figures are not as good as being shared by the authorities concerned.

Mian Anjum Nisar said the country’s July-Aug trade deficit has widened 120 percent to $7.5 billion after imports witnessed a new historic peak, with exports growth not matching the pace despite huge depreciation of local currency against the dollar. For the third straight month, exports have been dropping from their previous levels. Our export has long remained around $2 billion per month and the trend does not clearly change despite about 40 percent currency depreciation during the government’s tenure in the past three years. He said that rising imports would not only increase the external borrowing requirements but also dent the foreign exchange reserves, as the exports are not matching the pace of imports while the foreign remittances, which are important source of debt-free financing is expected to grow in single digit.

Mian Anjum Nisar said that previous current account surplus was emerged on the back of a sustained increase in remittances and a smaller trade deficit. To achieve consistency in that trend for a long period without compromising industrial growth the government will have to focus on increasing the exports further and put the business and trade issues on priority, otherwise, the economic problems and balance of payment could further disturb with the growing trade deficit.

The FPCCI former president said the government has already missed its annual export target, requiring at least 6 percent growth, he added. He said that the current export portfolio is marred by a lack of diversification, as few products are exported by some exporters to limited markets. So, a major enhancement in exports requires huge and wide structural reforms.

He, lamenting the gloomy picture of Pakistan’s position in the region with regard to its GDP growth, said that upward trend in remittances to Pakistan from overseas workers is a positive news for the country’s economy. He said that the oversees Pakistanis can invest in housing sector, agriculture, transportation and various other industries, which have huge potential. The government has badly failed to attract foreign investment because the persisting process of approval of projects discourages the investors, he added.

He said that the external trade projections figures have already become irrelevant within two months, showing weakening capacity of the central bank, Ministry of Planning & Development and the commerce ministry, which have been making annual plans, as imports during the Jul-Au period increased 73 percent to $12 while the two-month import bill was equal to 22 percent of the budgeted figures. He asked the economic managers to check the increase in the import of non-essential goods, as the government might face a challenge of an unmanageable current account deficit because of a projected record of $70 billion in imports this fiscal year. He pointed out that Pakistan exports have dropped from their previous levels, as the country’s exports in goods stood at $2.23 billion in August over a year ago, which were higher by 41 percent over the same month of the last year but these export receipts were the lowest in three months. The exports had peaked to $2.73 billion in June, then it dropped to $2.34 billion in July and finally further slipped to $2.32 billion in August.

While the imports last month hit a record high of $6.5 billion, which were higher by 95 percent, leading to widen yearly trade deficit to $4.2 billion in August.

He asked the bureaucracy to mould simple procedures by revisiting the existing processes so that the investors could be facilitated. He called for lowering of import duty on smuggling prone items, increasing the share of direct taxes in revenue and decreasing the slab of indirect taxes to achieve the key economic targets set for the year 2021-22.

He said that a quick turnaround can come from increasing competitiveness of the existing export base and demand-led production of agricultural products, especially high-value agriculture products. The long-term strategy needs structural reforms of the entire export sector, including high tech and innovative products, value-added exports commodities and market diversification towards unexplored markets.

BEIJING, Sept. 11 (DNA): Guangzhou Arbitration Commission (GZAC), China and Center for International Investment and Commercial Arbitration (CIICA) – Pakistan’s first international arbitration center – signed a memorandum of understanding (MoU), to deepen cooperation in international arbitration between both countries, according to China Economic Net.

GZAC stated that the signing of MoU symbolizes the joint construction of Belt and Road Initiative (BRI) by arbitration organizations of China and Pakistan. 

In the future, the two sides will further promote the “Four Sharing”, explore new paths for the development of online dispute settlement mechanisms, jointly cope with the increasing number of transnational disputes and offer international arbitration services in a better way.

Chen Simin, Director of GZAC, noted on the occasion that the cooperation reached between CIICA and GZAC in the “Four Sharing” will surely promote the cooperation between China and Pakistan in the field of arbitration legal services.

Rana Sajjad Ahmad, Founder & President of CIICA, pointed out that at present, the construction of CPEC is of great importance to Pakistan’s development, and there is an urgent need to improve the relevant legal dispute settlement mechanism.

“CIICA highly acknowledges the innovation and achievements in the construction of the online dispute settlement mechanism of GZAC,” he said, adding that CIICA is willing to collaborate with GZAC to promote the integration and interoperability of arbitration legal services between both countries.

Yang Yong, Director of China Council for the Promotion of International Trade, Guangzhou Committee, congratulates on the signing of the MoU and said it is hoped that through this cooperation, both sides can deepen mutual understanding and actively promote the development of bilateral trade and investment cooperation with international commercial arbitration.

With the deepening of trade and industrial cooperation between China and Pakistan, how to deal with the inevitable transnational commercial disputes has become a common concern of both sides. 

“Therefore, international arbitration is getting more and more important in promoting trade, investment, finance and infrastructure construction in CPEC,” remarked Ahmer Bilal Sufi, Former Federal Minister for Law and Parliamentary Affairs of Pakistan.

Islamabad /DNA/ – The Islamabad Chamber of Commerce & Industry (ICCI) has shown great concerns over the falling value of rupee against dollar as it would create multiple problems for business & economy and called upon the government to take urgent remedial measures for ending the volatility and bringing stability in the exchange rate.

Sardar Yasir Ilyas Khan, President, Islamabad Chamber of Commerce & Industry said that the value of Pakistani rupee has now tumbled to over Rs.168 against one dollar, which showed that our currency was losing its value at an alarming rate. It reflected a deteriorating market perception about the country’s capacity to finance its foreign debt obligations going forward. He said that the constant erosion in the value of rupee was severely disturbing all future plans of the business community as it needed a stable exchange rate for long-term business and investment planning.

He said that people were already facing great problems due to high inflation and falling value of rupee would bring a new wave of inflation in the country making life of common man more miserable. He said that Pakistan’s trade deficit has risen sharply in August driven by surging imports compared to exports as merchandise trade deficit has reportedly reached $4.05 billion in August against $1.740bn over the corresponding month of last year showing an increase of 133 percent. He stressed that the government should incentivise imports substitution to reduce dependence on imports that would arrest further devaluation of rupee and prevent the build-up of imported high inflation. He said that the traders were also reportedly booking dollars for future import payments at a higher premium or spread, which predicted further rupee depreciation. He said that in this scenario, the growth of the economy would remain uncertain amid fears of further deterioration in the fiscal and current account imbalances and it was high time that the government should take urgent remedial measures to curb the situation from getting worse.

Fatma Azim Senior Vice President and Abdul Rehman Khan Vice President ICCI said that some industries were importing around 70 percent of their raw material for manufacturing activities and decreasing value of rupee would further push up production cost making our exports more uncompetitive in the international market. They said that the government was charging high taxes on POL products and emphasized that it should make significant cuts in such taxes in these tough times to provide some relief to the inflation-hit people.  

ISLAMABAD, SEPT 10 (DNA) – The internet has most critical role to play in emerging business environment and has already been able to contribute more than 15% of global GDP. Likewise, digital economy and e-commerce are great opportunity for SMEs, which are back bone of Pakistan’s economy as there are more than 3.2 million SMEs, accounting for nearly 90% of all enterprises in the country. 

This was the crux of discussion by trade experts during the webinar ‘Ecommerce and SMEs Preparedness’ organized by Sustainable Development Policy Institute (SDPI), in collaboration with International Trade Center Geneva (ITC) and Ministry of Commerce, here on Friday.   

The trade experts also highlighted that SMEs in Pakistan employ about 70% of the national labor force whereas exports by Pakistani SMEs account for 25% of total exports of the country. The true potential of SMEs can be leveraged if they become technology and internet enabled and thus, having the right eco-system and policy environment to trade internationally through ecommerce.

National Project Coordinator of ITC, Dr Tauqir Shah, while giving the overview of the Revenue Mobilisation, Investment and Trade Programme (ReMIT), which has been taken in partnership with ministry of commerce, said that ITC will strive to   enable small and medium enterprises (SMEs) in Pakistan to effectively engage in international markets.

He added that ITC is the only development agency that is fully dedicated to supporting the internationalization of small and medium-sized enterprises (SMEs). ITC enables SMEs in developing and transition economies to become more competitive and connect to international markets for trade and investment, thus raising incomes and creating job opportunities, especially for women, young people, and economically left behind communities.

Ms Aisha Humera Moriani, Senior Joint Secretary E-Commerce, Ministry of Commerce (MoC, informed the participants that the National Ecommerce policy is setting the direction for development of ecommerce, and it highlights SMEs as a key pillar. She added further that the freelancers are adding on to the ecosystem by creating huge remittances by contributing to the economic cycle of the country. She said that role of MoC is to ensure that public authorities and private sector can function and work hand in hand. 

While highlighting the regulatory challenges Director General, Competition Commission of Pakistan, Mr Ahmad Qadir, explained that the key stakeholders are e-commerce enterprises, financial institutions, revenue authorities, regulatory bodies and most importantly the consumers. He said that the consumer protection guidelines should be adhered to in line with the e-commerce policy framework.

Dr Vaqar Ahmed, Joint Executive Director, SDPI, earlier asserted that there are three most crucial areas for promotion of e-commerce including enabling infrastructure for online businesses in second-tier cities and rural areas; reducing fragmentation in tax regime faced by these businesses; and responding to customer feedback and experience in a more responsive manner.

Asfandyar Farrukh, Member National E-Commerce Council, Mr. Sheharyar Tahir, Head, External Affairs, SMEDA, Dr. Ghulam Samad, Senior Research Officer, CAREC Institute, also shared their insights and experience on participation of SMEs in global trade through e-commerce. They were of the view that fundamental issue is the financing faced by SMEs in reference to e-commerce policy.

The experts highlighted that the cross-border e-commerce provides a unique opportunity for small and medium-sized enterprises (SMEs) in countries and regions that may traditionally have found it difficult to reach regional and international markets and connect with potential buyers beyond their borders. SMEs development is directly linked with the development of cross border ecommerce.