Finance Minister Muhammad Aurangzeb is right to call exports the backbone of Pakistan’s economy. But for too long, that backbone has been brittle, held up more by slogans than by structural strength.
Even as newspaper headlines hint at a nascent recovery, our persistent economic instability cannot be overlooked. This makes it all the more urgent to recognize that buzzwords alone cannot bridge the chasm between our $32 billion baseline and the $60-70 billion export potential needed to lift the country out of its fiscal malaise.
With the federal budget on the horizon, government officials have reiterated their support for the industrial base. However, unless these budgetary allocations address systemic flaws–rather than appeasing a handful of entrenched players–Pakistan will continue to undercut its ambitions.
Flagship mechanisms, including the Export Finance Scheme (EFS) and the Pakistan Single Window (PSW), have offered crucial support, but largely to established textile exporters. Meanwhile, Small and Medium Enterprises (SMEs), which could easily drive 40-60% of any serious export expansion, remain sidelined and underserved.
Systemic inefficiencies already choke the sector. Chief among them is the liquidity crunch caused by chronic tax refund delays: over Rs210 billion in refunds have been trapped in bureaucratic limbo for years. This forces exporters to borrow, strangling working capital and eroding competitiveness.
The cost of doing business compounds the problem. Electricity tariffs now hover around 17.5¢/kWh following subsidy withdrawals: more than double the rates in Bangladesh and Vietnam. Exporting a container from Pakistan costs roughly $406; in South Korea, the same costs $196.
Perhaps most alarming is the lack of product diversification. Textiles still account for over 60% of exports, often in low-value-added forms, such as yarn and fabric. The disparity with Bangladesh is instructive: it imports Pakistani cotton, converts it into garments, and earns $6 billion from one million bales. Pakistan, exporting that same cotton as yarn and fabric, earns just $1.5 billion.
Similar frustrations have been echoed by processed fruit and juice exporters–part of Pakistan’s overlooked agribusiness base–who recently decried their exclusion from key government incentives. These are globally viable, value-added industries with strong export potential. Penalizing them while demanding headline export growth reflects a deeper structural contradiction.
The writing on the wall is clear: Pakistan cannot build an export-driven economy on ad-hoc incentives and fragmented strategies. We need policy stability. No ifs, no buts. Moreover, SMEs must gain real (not rhetorical) access to export finance. Pakistan’s export competitiveness can no longer depend solely on cost-cutting; the new currency of trade is standards, speed, and strategic clarity.
