Irfan Iqbal Sheikh, President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed his shock that as per latest trade statistics of Pakistan, exports have declined by 26.68 percent in April 2023 on YoY basis.
He said this is the direct, inevitable and forewarned result of the sudden, harshest withdrawal of gas & power subsidies for the five zero-rated, export-oriented industries on the dictation of the IMF; however, to add insult to injury, the IMF EFF program has not yet been resumed.
He explained that the concessional tariffs were effective only for the five zero-rated sectors: textile, jute, leather, surgical and sports goods. These sectors have posted tremendous deceleration in their exports in general and textiles in particular, which has plunged 29 percent on YoY basis in April 2023. What else the government needed to record to ascertain that their policy was destructive and futile for the trade & industry, he added.
Irfan Iqbal Sheikh highlighted the fact that Pakistan’s exports during July-April FY23 were recorded at $23.174 billion against the exports of $26.247 billion in July-April FY22, with most drastic decline registered in April 2023 as exports were recorded at $ 2.124 billion in April 2023 against the exports of $ 2.897 billion in April 2022 – a 26.68 percent decline.
He recalled that as President FPCCI, he has issued six policy statements in no-uncertain-terms on the issue in the past two months, but the government and its economic team couldn’t see the storm that was building.
To put the exports performance in perspective vis-à-vis Pakistan’s foreign exchange reserves (FER) and yearning for the release of merely one billion dollar tranche from IMF, the country has witnessed a loss of $3.073 billion in its exports alone so far in FY23, and, it all happened in the failed and wasted process to appease the IMF. Where is this priced, elusive IMF deal, even after implementing all the harsh decisions that made no economic sense, Sheikh asked.
FPCCI Chief has categorically demanded the resumption & effective implementation of Regionally Competitive Energy Tariffs (RCET) for electricity, gas and RLNG for the export-oriented industries for remainder of the outgoing fiscal year and for upcoming FY24 to salvage the exports, industry, employment, revenues and balance of payments. Otherwise, there will be no industry left in the country.
Irfan Iqbal Sheikh reiterated FPCCI’s demand that as far as exports are concerned, the government needs to devise a protective mechanism that ensures access to finance and completion of export orders in hand through effective export financing scheme (EFS), temporary economic refinance facility (TERF) and long-term financing facility (LTFF) – as no industry can operate at a policy rate of 21 percent and business loans at a minimum of 23.5 percent interest rate.
