ISLAMABAD
The All Pakistan Business Forum (APBF) has warned that Pakistan’s widening trade deficit is exposing the economy to mounting external financing pressures, stressing that sustainable economic stability requires stronger export earnings, import substitution and greater participation of small and medium enterprises in international trade.
APBF President Syed Maaz Mahmood and Chairman Ibrahim Qureshi, in a joint statement, said the growing gap between imports and exports was a reflection of the country’s inability to build a sufficiently broad and competitive export base.
They stressed that dependence on foreign loans, bilateral debt rollovers and fresh borrowing could not replace a strong domestic export economy.
Referring to the latest trade figures, they said Pakistan’s trade deficit had increased 16 per cent to $14.6 billion during July-October of the current fiscal year, as imports climbed 12.5 per cent to $26 billion while exports rose by only 8.5 per cent to $11.4 billion.
They observed that the monthly import bill had reached an average of around $6.5 billion, compared with export earnings of approximately $2.8 billion, highlighting the scale of the imbalance. The faster growth in imports was putting additional pressure on the external account and increasing the need for foreign financing.
Syed Maaz Mahmood said Pakistan must move beyond short-term measures to manage its external payments and focus on building sustainable sources of foreign exchange through exports, industrialisation and investment.
Maaz Mahmood stressed that the government should develop a predictable policy framework covering taxation, energy, trade and investment so that businesses could make long-term expansion decisions with confidence.
APBF Chairman Ibrahim Qureshi said small and medium enterprises could play a much bigger role in narrowing the trade gap if they were provided with affordable financing, modern technology and easier access to international markets.
He observed that a large number of small manufacturers possessed the potential to become exporters but remained constrained by limited working capital, complicated regulatory procedures and difficulties in meeting international quality and certification requirements.
Qureshi called for a simplified financing mechanism that would enable viable SMEs to obtain loans without excessive documentation and lengthy approval procedures. He said financial support should be linked with productivity improvements, technological modernisation and the development of export-oriented products.
