Exporters in Pakistan want refunds to be done urgently. They say the cash flow crunch is causing problems, denting the country’s exports and impairing textile capacity. They stress the need to reform the tax system and make it export and trade friendly. They want gas supply at fair prices.
Other issues include the high cost of doing business, including high withholding and indirect taxes, and a distorted import tariff structure; weak implementation of export promotion measures; lack of coordinated support from formal institutions at federal and provincial levels; the relatively high cost of energy vis-a-vis regional economies; and an exchange rate regime that hurts exporters.
Exporters say an export-oriented industrial policy is needed with a focus on broader institutional support to exporters along with a duty-free regime for inputs and a strategic collaboration between public and private sectors. Small and medium enterprises need to lend financial and technological help with a focus on operational management skills, financial assistance, innovation, and technological upgradation.
The country’s falling competitiveness is also driven by poor trade facilitation, infrastructure gaps, inefficient logistics and poor investment climate. Export competitiveness can be improved by making use of the country’s GSP Plus status and bilateral and regional trade agreements, for example, with China, Malaysia, and Sri Lanka.