20000113

Wide scope for export

of gift items, jewellery,

stones, fish in US

RECORDER REPORT

KARACHI: Although a strong advice by the U.S. State Department to its citizens against visiting Pakistan is a serious setback in promoting exports from Pakistan, one of the main reasons for our narrow export base is the fact that more than 70 percent of the Export Promotion Bureau's promotional activities relate to textile sector.

The Consulate General of Pakistan in the USA has in a report, received by the Ministry of Commerce, very strongly suggested that since other sectors like gift items, gold jewellery, semi-precious stones, footwear, fish products and software have an excellent market in the United States, "we must participate in maximum exhibitions to promote these high value-added products".

The following problems and proposals have been highlighted in the report:

The label "Made in Pakistan" carries a poor image and even good Pakistani companies find it hard to market their products in the U.S.

The growth rate of e-commerce is approximately 30 percent per annum. Besides increase in volume of trade it offers great prospects for export of manpower from Pakistan. Unfortunately no concerted effort has been made to promote software export and development of e-commerce in Pakistan. As an initial step Pakistani companies may be encouraged to develop their web-sites and venture into e-commerce.

Inconsistent government policies relating to: duty draw-back schemes, exchange rate, payment of commission to overseas agents, and cotton and yarn prices.

Textile Quota Management policy: Pakistan can enhance its exports earning from textile through full utlisation of quotas, especially in clothing and made-up products. Similarly, some incentives should be given to categories where utilisation is poor. Operation difficulties faced by exporter in processing quota documents may be removed to avoid unnecessary delay.

Narrow export base: Main reliance is on single commodity i.e. cotton. If cotton crop fails, the exports fall. There is need to broaden the product's range especially man made fibre (mmf) products as real value-addition is in mmf categories. There are also non-quota items. China, Hong Kong and Indonesia are exporting huge quantities of mmf products and earning higher unit price. The tariff structure for mmf needs to be revised downwards.

Less appreciation to quality and delivery schedule by the exporters. The commercial courts set up by the government should be activated. Slow feedback from different departments in Pakistan has also been cited as one of the reasons.

During the last year the U.S. imports declined by 5.4 percent and the import of fabrics declined by 10-15 percent. Due to Far Eastern financial crisis, the imports from these countries are cheaper. Pakistani textile products are 10-15 percent more expensive than the prices offered by the competitors for the same products and quality. Quota trading is an important factor for expensive exports. The quota policy needs to be rationalised and an objective study on "cost of production" may also be conducted to ensure competitive prices.

Due to expensive labour, the commodity manufacturing in the U.S. is being shifted neighbouring countries. The demand for raw materials used in consumer goods e.g. cottonyarn, fabric, leather, etc. is, therefore, decreasing. There is, however, demand for high-count yarn and broad-width fabric, which Pakistan is not producing. Pakistani exporters should be encouraged to visit South American and Caribbean regions. A number of Far Eastern countries, have opened their subsidiary offices. The EPB may consider to send a market exploration mission to South American and Caribbean regions.

In the garment sector, both knitted and woven, Pakistan is producing basic items. Although a few brand names have started sourcing from Pakistan, no designer products are being exported. Designer products are highly value-added. Pakistani companies should be encouraged to visit designer exhibitions. The International Boutique show in New York, could be useful for initial contacts.

The garment sector in Pakistan is operating as a cottage industry, whereas, garment manufacturing, especially in Caribbean region, is being undertaken on large industrial scales. This has helped in ensuring consistency in quality and on-time delivery of goods. The buyers, therefore, prefer to deal with them.

The shipping time from Pakistan to the U.S. is 35-40 days as opposed to 20-25 days from India, 28 days from Bangladesh and seven days Caribbean region. Exports from Pakistan are through feeder-services from Dubai where the consignments are transshipped on steamers for the U.S. The unduly prolonged shipment period is badly affecting Pakistan's exports.

Low environmental conditions at the Karachi fish harbour: Poor handling and processing of the fish catch is not only wasting the valueable natural resources but also creating negative image for fish industry. The sanitary conditions at the fish harbour must be improved and a video film on port facilities, fiash handling and processing and packing, may be prepared for review by foreign buyers.

There is a shortage of IT professionals in the local market and the trend is towards out-sourcing. With new technologies and innovative applications like e-commerce, out-sourcing is likely to expand at a faster rate. The prospects are exceptionally promising for IT firms especially for internet service provider, websites operations. There is a need to enhance the marketing efforts.