PM’s Advisor Fears Gas Shortfall Could Stifle Exports

The ongoing gas shortfall may cause export growth to stagnate from December onwards, and industrial production units (electricity) could face similar problems throughout the winters.

These remarks were made at the Karachi Press Club by the Adviser to the PM on Commerce, Textile, Industry and Production, Abdul Razak Dawood, who is worried that the local industry may lose ground on recoveries made in the past few months, particularly with exports.

Discussing his concerns with reporters at the said venue, Dawood explained that industrial units with combined-cycle captive power plants would continue to get uninterrupted gas supplies. He remarked that these are efficient power plants that help generate additional power. However, simple-cycle captive power plants may face shortfalls in gas supplies. “I don’t know the extent of the curtailment,” he said.

Regarding exports, Dawood explained,

We’re expecting total exports of $38.7 billion in 2021-22, with the share of services at $7.5 billion. The export target for the textile sector alone is $20 billion.

The Ministry of Commerce is banking on the IT industry, which saw a 47 percent gain in exports in 2020-21, to help it achieve a 30 percent increase in total exports. IT exports have already increased by about 45 percent in the first four months of this year, he revealed.

The Commerce Adviser added that the government would lower import levies on industrial raw materials in the next budget. He remarked that the Commerce Ministry is working tirelessly to spearhead growth in exports of non-traditional items, including pharmaceuticals and chemicals, to obscure markets such as Africa and Central Asia. Exports of such kind have increased by 77 percent in the first four months of this fiscal year already, and exports to non-traditional markets climbed by 60 percent simultaneously, he added.

Furthermore, the Commerce Adviser announced that Pakistan would start exporting rice to Iran in the coming months and import gas in return. “This trade will take place in the form of barter under a private arrangement and involve no banking channels,” he said.

He mentioned that the original free trade agreement (FTA) with China was unfavorable to Pakistani enterprises better and FTA II has reworked those shortcomings. Our exports to China are presently increasing as a result of FTA II, he said, remarking that they will soon be on par with Pakistan’s exports to the European Union and the United States.