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Trade Policy Speech 2007-08

Ladies and Gentlemen: Assalamo-Alikum.

Today I have the rare privilege of presenting before you the trade policy for 2007-08. This is the fifth successive trade policy that I as Commerce Minister have the honour to present to the people of Pakistan. This honour is magnified by the realisation that it is also the last Trade Policy that will be presented by our Government, which is completing its full five year term of office in a few months time [the only such instance in the parliamentary history of this country]; and many of us will soon present ourselves for re-election before our electorate. May our electorate judge wisely and base their fresh choices on our performance and record of the past five years.

Since President Musharraf assumed office in 1999, his economic reforms agenda has led Pakistan through a period of impressive economic growth. Policies under the economic reforms agenda have been consistent, prudent and transparent. These policies, coupled with good governance, have strengthened Pakistan’s economy through responsible fiscal management and disciplined implementation of structural reforms, resulting in economic stability. The upshot of this is that Pakistan is now confidently travelling on the road to achieve the twin objectives of sustainable economic growth and eradication of poverty.

Throughout this period, the Ministry of Commerce has diligently followed the guidelines set out in the reforms agenda, and has been carrying out its assigned role of increasing the country’s exports. As a result, the past 7 years have witnessed unprecedented increase in merchandise exports, which have grown by almost 112% from US$7.8 billion in 1998-1999 to US$16.5 billion in 2005-06. Last year we had set for ourselves an export target of $ 18.6 billion. I would now like to inform you that our merchandise exports for the year 2006-07 were US $ 17.011 billion. Our services exports for 11 months of the year 2006-07, were US $ 3.1 billion, and our defence exports for the full year were US $ 63 million. This is the first time in the history of Pakistan that merchandise exports have crossed the barrier of US $ 17 billion.

Export Performance 2006-07

This past year of 2006-07 has been a particularly challenging one, where the uncertainties resulting from the war in Iraq caused oil prices to maintain their high levels. The high price of crude oil increased our petroleum import bill, and also had an inflationary effect, thereby adding to the cost of production and the cost of doing business. During the first 11 months of 2006-07, for example the Petroleum Group Imports increased by 11.1% as compared to the same period of 2005-06. Despite the challenges that our exports have had to face during last year, they have still continued to grow. This is a tribute to the resilience and hard work of our businessmen and exporters and the business friendly policies of your government.

During the first 11 months of 2006-07, the exports of Textiles Group increased by 6%. It is heartening to note that within the textile group, exports of some products have almost doubled in the first 11 months of 2006-07. Among these, Art Silk & synthetic textiles have grown by 122%, Tents and Canvas by 99%, and Yarn other than cotton yarn by 82.7%. This shows that our product base within textiles is diversifying from the traditional cotton base. Exports of other textiles products that have continued to grow, during the same period, are knitwear, and readymade garments, increasing by 12.9% and 5.4% respectively.

It would be recalled that last year I had announced a targeted Rapid Export Growth Strategy with a focus on the engineering goods sector. I am happy to inform you that during the period July-May 2006-07, the engineering goods sector has shown an overall increase of 8.7% over the same period last year. The most vibrant component within this group is electric fans which registered an ncrease of 28.8%.

Another fast developing sector is that of gems and jewellery. The exports of Gems have increased by 15.9% and exports of jewellery have risen from US$ 15.1 million to US$ 34.5 million. This is an increase of 120% during the first 11 months of this year. This is the reason why we have decided to increase our focus on this sector and it will now become another one of our targets for the Rapid Export Growth Strategy.

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