As of right now, the estimated potential annual exports of Pakistan are at US$ 88.1 billion, about 4 times the actual current level given the level of development, remoteness, factor endowments and economic size; According to the World Bank as they published their recent report “Pakistan Development Update”.
According to the report, the opportunity cost of Pakistan’s “missing exports” is approximately at 893,000 jobs and US$ 1.74 billion in foregone taxes. Agriculture export sector could provide 152,000 jobs of these and 741,000 jobs could be created in the manufacturing export sector.Uzbekistan or Kazakhstan should be prioritized for Preferential trade agreements along with the negotiation of agreements on transit trade with Afghanistan so that the physical access to those markets can be facilitated, the report suggested.
There are a few steps that the government can take to reap the full benefits of the export potential:
•Firstly, the trade policy framework of Pakistan should be upgraded. What needs to be done is the reduction of the anti-export bias of tariff policy.
•Secondly, the trade enhancement schemes need to be reestablished. The result of putting forward these schemes gives benefits to those exporters whose target market offers low export potential and low dynamism which ultimately results in ineffective and non-efficient allocation of scarce public funds. High-potential Asian destinations should be targeted rather than low potential African, Latin American, or Pacific Islands ones.
•Thirdly, high potential for Pakistan is central Asian republics therefore, it is the need of the hour for the government of Pakistan negotiate market access with high potential destinations.
