Pakistan’s Failure to Export Technology


Zafar Aziz Chaudhry

The high cost of doing business is one of the major factors, which made Pakistani exports un-competitive in world markets

The big news of present-day world trade is that iPhone shipments from India surpassed $1 billion in five months since April. This confirms the tech giant’s resolve to score another victory in the alien land of the South Asian country. According to the report, the Indian export shipments of iPhones are expected to reach $2.5 billion in the 12 months leading up to March 2023, nearly doubling from the year leading up to March 2022.
Earlier this year, Apple began producing the iPhone 13 in India, and the corporation has now revealed its intentions to produce the most recent iPhone 14. Since 2017, the tech giant has begun producing iPhones in India. According to the report, gadgets exported from India between April and August this year include the iPhone 11, 12, and 13 versions. In addition to moving some iPhone manufacturing from China to India, the second-largest smartphone market in the world, Apple is also intending to assemble iPad tablets there, according to the report.
Apple is now producing iPhone 14 in India while there is not a single official Apple store in Pakistan.
In Pakistan, the price of the iPhone 14 is Rs.419,999. Pakistanis could buy iPhones at a less price if our country starts manufacturing iPhones themselves. Currently, Apple is producing most of its advanced phones in India, which include the iPhone SE, iPhone 12, iPhone 13 and now iPhone 14. This month’s start, Apple launched its latest iPhone series, the iPhone 14 model. The newly unveiled iPhone 14 models have an improved camera, a satellite messaging feature to send SOS texts in emergencies and robust sensors.
History of Pakistan-India trade relations shows that immediately after Partition in 1947, the trade volume between the two countries was considerably high as both depended heavily on each other. However, there was a dramatic decline in trade in 1949 when Pakistan decided not to devalue its currency, rendering the trade balance unfavourable for India. Subsequently, trade was completely paralyzed as a consequence of the 1965 and 1971 wars.
The high cost of doing business is one of the major factors, which made Pakistani exports un-competitive in world markets. Due to the inefficient and unfriendly socio-economic environment, the cost of operating a business in Pakistan is considerably high. Moreover, an adverse effect has been made on exports due to the spiralling rise of population. Additionally, the high effective import tariff rates and limited export market access tend to discourage exports. Second, the supporting services for exporters are inadequate, especially those for long-term financing of capacity expansions and market intelligence services to secure new export contracts.
Pakistan’s payment problems have been chronic since the 1970s, with the cost of oil imports primarily responsible for the trade imbalance. The growth of exports and remittances from Pakistanis working abroad (mostly in the Middle East) helped Pakistan to keep the payments deficit in check.
Pakistan’s economy is currently bedevilled in low growth, high inflation and unemployment, falling investment, excessive fiscal deficits, and a deteriorating external balance position.
The trade deficit has been on the rise owing to an unprecedented increase in imports due to a rise in global commodity prices, Since Ayub Khan’s era, no steps have been taken to check the unbridled rise in population. The high cost of doing business is one of the major factors which made Pakistani exports un-competitive in world markets. Due to the inefficient and unfriendly socio-economic environment, the cost of operating a business in Pakistan is considerably high.
Pakistan still has the potential to reduce trade costs significantly by improving shipping connectivity and enhancing its logistics performance. Considerable investment in infrastructure to link major seaports and international airports to the hinterland could reduce domestic trade costs.
Pakistan’s trade is also dependent on its good brotherly relations with foreign countries. Pakistan maintains a tense relationship with the Republic of India due to the Kashmir conflict, although it has close ties with the People’s Republic of China, Turkey, Saudi Arabia and Gulf Arab states and fluctuating relationship with the United States of America due to overlapping interests during the Cold War and War on Terror. Pakistan’s exports to the seven regional countries witnessed an increase of 23.50 per cent in the first three quarters of the fiscal year (2021-22), as compared to the corresponding quarter of last year.
The government released figures showing a satisfactory increase in export with China. Pakistan’s exports to China posted growth of 51.27 per cent to $2126.778 million in nine months of this year from $1405.890 million during last year while exports to Bangladesh also increased by 47.94 per cent to $648.936 million from $438.626 million.
However its exports to Afghanistan(dropped by 50%) and Siri Lanka, Nepal and Maldives showed a fair increase from the previous year.
It has also been reported by the government that the country’s export to Afghanistan however has dropped by 50.50 per cent to $369.382 million this year from $746.347 million whereas exports to India also dipped by 54.21 per cent to $1.006 million from $2.197.
Similarly, exports to Sri Lanka rose by 53.76 per cent to $284.717 million from $185.165 million in the previous year whereas exports to Nepal also increased by 35.86 per cent to $4.792 million from $3.527 million, in addition, exports to the Maldives increased by 24.32 per cent to $5.076 million from $4.083 million, it added
Pakistan’s significant exports relate to miscellaneous textiles articles and worn clothing, Cotton, Knitted and not-knitted clothing, accessories, Cereals, and Articles of Leather. Copper, surgical instruments, sports goods, mineral fuels, Optical, technical and medical apparatus.
Some interesting facts have been brought to light by the incredible progress of Apple Inc as shown in India. This US giant tech company is hopeful of earning almost double revenue in the quarter that ended June the country
Since India will manufacture phones for the US giant tech company, reports hint at almost double revenue in the country in the quarter that ended June 2022. According to Apple CEO Tim Cook, they have set June quarter revenue records in both developed and emerging markets, with strong double-digit growth in countries like Brazil, Vietnam, Indonesia, and a near-doubling revenue in India.
Presently, JP Morgan released a report on “Apple Supply Chain relocation”, predicting that Apple will shift 5 per cent of its iPhone production to India in late 2022, reaching 25 per cent by 2025.
At present, the Pakistanis buy iPhones the government imports from China which is quite costly. Thus, Pakistanis buy iPhones which the government imports mainly from China, which also cost a lot. Though Pakistan has started to manufacture Samsung phones in the country, maybe in the future, our government will take the initiative to contact Apple and urge them to start production of iPhones in Pakistan.