ISLAMABAD:
Commerce Minister Syed Naveed Qamar said on Wednesday that imposing the import ban was a bad political decision, extending his support for lifting the ban as soon as possible.
Qamar made the remarks two days after the Pakistan Bureau of Statistics (PBS) reported that the import bill hit a record $80 billion in the last financial year, up 55% despite the import ban. import about 41 goods nearly two months ago.
“Recently, we took the wrong direction by imposing the import ban, but it was done in an extreme situation,” the trade minister remarked during a trade seminar organized by the Policy Research Institute of Market Economy (PRIME) with the support of Friedrich Naumann Foundation (FNF) Pakistan.
The minister said he would argue against a further extension of the ban which had been imposed for two months and was due to expire on July 18. “But not everything is in the hands of the Department of Commerce,” he said.
Qamar said the import ban had proven counterproductive and “we will have to lift it soon”.
On May 19, the federal cabinet banned the import of about 41 items for two months to prevent an impending default. The Express Tribune reported at the time that the measure would be too weak, as it would contain the import bill of just $600 million, or less than 5% of the
projected imports.
Qamar said the import ban was not a well-thought-out move by the government, but was meant to temporarily restrict imports.
He said promoting exports by tapping into new markets and widening the export basket by reducing trade barriers was the ultimate way forward.
For the last fiscal year, Pakistan’s previous Tehreek-e-Insaf (PTI) government aimed to restrict imports to $55 billion, which soared to $80 billion.
Prime Minister Shehbaz Sharif initially issued directives to contain imports of $2 billion
per month.
The Department of Commerce and the Federal Board of Revenue (FBR) have prepared a plan to reduce imports by $984 million per month through the ban and increased regulatory duties.
Finance Minister Miftah Ismail opposed the imposition of import restrictions and wanted regulatory duties to be
increased significantly.
The cabinet’s Economic Coordinating Committee on Tuesday allowed the clearance of goods that arrived in Pakistan in violation of the ban until June 30.
Tariff and non-tariff trade barriers seriously hamper growth and sustainability, said Esther Perez Ruiz, Resident Representative of the International Monetary Fund (IMF) while advocating for free trade.
Esther – a Spanish national – said Spain’s integration into the EU in the 1980s and 1990s was a political aspiration for the country, which led to massive economic transformation. However, Pakistan’s export-to-GDP ratio fell from 14% in 1990 to 10% in the 2000s.
The resident representative of the IMF said that Pakistan’s per capita GDP growth was very low compared to its
regional competitors.
To realize its export potential, Pakistan needs proactive policies: exchange rate flexibility, efficient allocation of resources, elimination of subsidies and creation of a business-friendly environment,
she added.
The trade minister said politics had been the biggest impediment to regional trade. There are sanctions against Iran, Afghanistan is facing security and economic issues, then there is India-Pakistan politics and there are also protagonists and antagonists of the China-Pakistan Economic Corridor (CPEC ), Qamar said.
“It’s practically the Arabian Sea which is neutral for us for trade,” he said while explaining the limits of regional trade.
He said Pakistan was the big beneficiary of the GSP Plus scheme, hoping to get an extension for the next 10 years.
The minister said fears of a global recession could have implications for exports, but hoped that, unlike last year, this year there would be an increase in export volumes rather than just benefiting from the rise in world commodity prices.
Indonesian Ambassador Adam Mulawarman Tugio says Pakistan should try to expand its trade with the Association of Southeast Asian Nations (ASEAN) by changing its current strategy to deal only with individual members of Asean.
Published in The Express Tribune, July 7e2022.
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