Pakistan should immediately implement a currency swap agreement with China: Top businessperson

Lahore: Pakistan should immediately implement a currency swap agreement with China to facilitate imports, a top Pakistani businessperson said.

In a meeting with Advisor to Prime Minister on Commerce Abdul Razzaq Dawood here, Lahore Chamber of Commerce and Industry (LCCI president Mian Nauman Kabir pointed out that such an arrangement will benefit importers.

“We urge the government to immediately implement a currency swap with China from where our imports amount to around US $ 13 billion. The Customs and regulatory duties on luxury and non-essential items should be increased for managing import bill,” he maintained.

The exports were heavily concentrated in a few product lines, as textiles, rice and leather account for almost 70 per cent of exports, he added.

Kabir contended that there was a need to diversify “our exports, especially focusing on potential sectors such as pharmaceuticals, engineering and halal (legitimate under Islam) food. These potential sectors should be zero-rated for increasing export competitiveness,” he opined.

The LCCI chief reminded that the LCCI had always advocated effective utilisation of export development fund with due consultation with the stakeholders.

“The steep rise in the trade deficit should be checked. In the first quarter of the current financial year (July-September 2021), the trade deficit stood at $11.66 billion that is 100.6 per cent higher, compared with the same period of the last year. This recent increase in the trade deficit has played a part in the devaluation of the rupee,” he mentioned.

The LCCI president stressed the need for making sincere efforts for exploring new markets, adding that destinations of around 65 per cent of the exports were 10 countries.

“For enhancing exports to untapped potential markets like Africa, Russia and Central Asia, formal banking channels should be established on a priority basis. This issue has already been raised with the SBP [State Bank of Pakistan] and [the] Ministry of Commerce. We appreciate the government for reducing duties on many raw material lines in the last couple of years,” he observed, adding that the process of tariff rationalisation should continue.

Pakistan’s export diversification has improved considerably during the last three years, which would help enhance exports, a senior official said on Saturday.

Speaking at a meeting at the Lahore Chamber of Commerce and Industry (LCCI), Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood said that the market and product diversification was the only way to jack-up exports.

Speaking on the occasion, Abdul Razzaq Dawood stated that Pakistani exports of traditional items to non-traditional markets had increased 60 percent, while the export of non-traditional items to non-traditional markets had gone up 77 percent during the last three years.

“The government would introduce the policy of giving extra incentives on the exports of non-traditional products. The government is also going to sign a TIR (Transport Inward Transit) convention with Afghanistan for free movement of trucks to the Central Asian Republics. We are targeting Central Asian Republics to boost national exports,” he elaborated.

The government is also going to implement the “Look Africa Policy” and an official delegation will visit Nigeria next month, he remarked.

The adviser said the Temporary Economic Refinance Facility (TERF) of the State Bank of Pakistan for Small and Medium Enterprises (SMEs) and other targeted sectors would be restored, adding that the engineering and iron and steel sectors would be the next area of focus for tariff rationalisation.

He promised to give LCCI representation in the Export Development Fund Board and consider the proposal of currency swap agreement with China seriously.