Dr Abid Qaiyum Suleri
Like many other things, ’trade policy’ has turned into an annual ritual in Pakistan. Replete with ambitious phrases, it revolves around rapid export growth strategy (REGS). It has turned into a tool for implementing budgetary provisions related to import and export, while in reality, it ought to be a strategic document providing a long-term vision and a framework for what Pakistan would like to achieve through trade. Clarity of objective is extremely important. Unfortunately our focus is on process (to enhance exports) and we are least bothered about the end product — human development.
Trade policy formulation has always remained in the ambit of the Ministry of Commerce. It is the Minister of Commerce who announces it. However, the Ministry of Commerce only deals with imports and exports of goods. Trade in services, a sector that is contributing more than half of national Gross Domestic Product (GDP), does not fall in the domain of the commerce ministry. Of major services, the Ministry of Telecommunication deals with Information Technology services, Ministry of Finance looks after accountancy, manpower is a concern of the Ministry of Manpower and Labour, and so on.
Thanks to adhocism, we can supposedly do without long-term strategies, and a clear goal. Hence, a trade policy, formulated by a ministry that does not directly deal with the trade of half of the GDP contributors, is still acceptable to many stakeholders. There are so many suspects: the Ministry of Food, Agriculture and Livestock (MINFAL), the Ministry of Industry, the Ministry of Textile, the Ministry of Privatisation, the Ministry of Labour, and the Ministry of Finance, etc.
Let me give you an example from the most important segment of our exports, cotton and textile. The Ministry of Commerce has for the last two years been talking of the ’Clean Cotton Initiative’ without making any effort to take MINFAL on board. Is it possible to produce clean cotton without involving MINFAL as well as the provincial agricultural ministries? Certainly not.
People want trade to be a tool for poverty alleviation. Besides exports (only if they lead to employment generation), domestic trade is another major sector that may directly affect poverty. Unfortunately, very little is said in trade policies about domestic trade. This time, the Commerce Minister did mention ten research studies on domestic trade in his speech. However, nothing concrete was proposed to enhance domestic trade, for example on strengthening regulatory mechanisms that pave the way for fair trade practices.
To give trade a human face one needs to develop human resources for increase in productivity and employment. If we are aiming at an export of services, then we should also be ready to have surplus skilled service providers. Unfortunately the existing public sector infrastructure for skill enhancement is either not being operated satisfactorily or it does not match the requirements of a dynamic industry. We don’t have even a single institute to train retail sector managers, or to impart comprehensive training on customer relation. With these deficiencies, we are talking of entering the modern retail business and also inviting foreign investment in our retail sector. Aren’t we living in Utopia?
Let us accept for a moment that REGS is the panacea for every prevalent ill, then the focus of the trade policy should be on exports and exportable items. But here too we are lagging behind others on many counts. Our export basket as well as export destinations are extremely limited. Cotton and its secondary products comprise almost two-thirds of our export basket. More than half of our exports are bound for five destinations. Can we change this situation by simply providing freight subsidies for goods off to certain destinations? Does the trade policy suggest any solid measures to develop niche markets and enhance our competitiveness? The answers negate our claims that we are an Asian Tiger in the making.
Skilled labourers have never been and will never be a priority for our governments which measure development in monetary terms and in quantitative figures. Hence it is understandable why the government is so unmindful of the thousands of skilled football stitchers who will lose their jobs in the near future with the phasing out of the manually-stitched footballs. Yet it is shocking to note that the policy does not propose any facilities for manufacturers who will have to install mechanised football units if they want to remain in business.
Similarly, trade policy is silent on how does the government plan to tackle the issue of geographical indicators (GIs) under the World Trade Organisation. Already, India has laid a claim on Super Basmati by invoking GIs and our basmati rice exports are decreasing.
The most interesting part of the trade speech for me was the section where Commerce Minister informed his audience that as per the norm, the trade statistics released by the Federal Bureau of Statistics (FBS) only pertained to merchandise exports and imports. He said the trade figures released by the FBS will now also include data on defence exports as well as services exports and imports. According to the minister the defence exports totalled to $275 million last year and that decreased our trade deficit. I wonder why we are excluding defence imports from official trade statistics. Include it and I am sure our trade deficit will surpass all past records.
We need a trade policy with a clear objective of achieving human development. For that to happen, we must develop our industrial and agricultural sectors in a socially responsible way. Promotion of corporate social responsible culture is a must to meet various trade-related environmental and social concerns.
Similarly we need to think of the linkage between trade and gender. Trade impacts women and men differently, so the strategies for trade and development should not only minimise the negative effects of enhanced trade on women but also provide space for development of women entrepreneurs and workers. Wage disparity among men and women must be eliminated through an enabling environment that must be fostered through the trade policy.
To conclude, the emphasis should be on policy cohesiveness as well as promotion of consultative and participatory planning and implementation culture. It is heartening to see that the UNDP and Ministry of Commerce initiated a pre-trade policy consultative process by launching a joint venture, ’Trade Initiatives from a Human Development Perspective’ initiated a pre-trade policy consultative process. It is disappointing though that most of the recommendations resulting from this consultative process could not find their way into the final trade policy document. It is about time we put people above all else and started taking trade initiatives from a human development perspective. This is the only way to link trade with poverty reduction.