Our world is rapidly evolving, with COVID-19 disrupting virtually every aspect of global economics. While the pandemic struck the global economy, the economies of developing countries such as Pakistan suffered a more severe effect. The pandemic effect still lingers in all sectors, export business inclusive.
With 2022 just around the corner, things are taking a new turn, with COVID-19 uncovering countless opportunities, particularly in the export business.
This article discusses Pakistan's export performance during the pandemic and the export opportunities waiting for the country’s export business in 2022.
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The worldwide lockdown due to the COVID-19 pandemic overturned the state of the global economy. Business activities came to a stop, and ports were congested with cargoes. Islamabad, the Pakistani economy, was not exempt as it suffered economic blows.
The country’s economic growth was anticipated to bounce back by 1 to 1.5% by months of the current fiscal year (Fy2021), after its decline in the prior fiscal year 1.
Imran Khan's government, Pakistan prime minister, was part of the first administration to alleviate the lockdown restrictions, permitting exports to commence in April, a month after the lockdown regulation.
Because of the effective management of lockdown, Pakistan's economy revived in the fiscal year 2021 (Fy2021). The World Bank report says it is due to effective regulations of the lockdown to manage the spread of the virus while allowing economic activity to carry on to a large extent2.
The ease of the lockdown in Pakistan attracted inflows from foreign investors. The Pakistan October 2021 development update3 reveals that the country’s GDP growth jumped to 3.5% in Fy2021, after receding by 0.5% in Fy2020 due to the pandemic.
Furthermore, inflation alleviated, increasing the fiscal deficit by 7.3% GDP, affecting the current account deficit, which lessens to a 0.6% GDP. Pakistan's economy thrived amidst the virus, showing economic developments following the ease of the lockdown.
Pakistan's exports surpassed the $2 billion mark in November for the second month of the year, according to the announcement via Twitter from Abdul Razak Dawood, adviser on commerce to the prime minister4.
His words in quotes are, "Our exports have increased by 7.2% in November 2020 over the same period as last year." Further explaining that for the first five months of the current year, the exports have increased to $9.732 billion compared to $9.545 billion over the same period last year4.
To a vast extent, Pakistan's economic development relies on its exports by attracting foreign investment to sponsor the country's service debts, trade deficit and balance its currency strength. Despite the pandemic, there are still visible export opportunities and trade fair agreements that Pakistan can take advantage of in 2022.
Pakistan's economy comprises almost 3.3 million small and medium-sized enterprises. These companies differ, ranging from service providers, manufacturing companies, to startups.
They make up over 30% of the country's GDP, and approximately 25% generate exports5. The Pakistani government needs to authorize policies that enable SMEs to reach their maximum potentials and increase export opportunities.
The benefits include:
With Pakistan focused on making products and raw materials on the international market scale rather than the domestic demand level, it will open a door of opportunities in 2022.
An example is the Pakistan MMF (man-made fiber) to cotton ratio, which is 30:70, whereas the global balance is 70:30. Its reform will impact Pakistan's exports positively. An additional method in making export competitive is to simmer down on the import restrictions.
With a change to manufacturing products from low to high grade, it will shoot up Pakistan on the export ladder.
The benefits include:
The Pakistani government must make it easy to carry out business in the country to promote creation and originality, leading to better quality products and services.
The tactical improvement of entrepreneurship and labor force will make Pakistan goods competitive worldwide. It will be due to the overall focus and grooming of the workforce leading to exceptional quality.
The benefits are:
In 2019, Pakistan exported $951 million in non-knit women’s suits, taking place as the 16th biggest exporter of non-knit women's suits globally7. By the same year, non-knit women's suits had become an exported product in Pakistan.
The primary homes to the non-knit women's suits from Pakistan are the United States to a $217M exports, Spain to $140M, Germany to $130M, France to $78.4M, and the United Kingdom to $76.5M.
Pakistan became the 2nd biggest exporter of house linens globally in 2019. At that year, house linens became the most exported product in Pakistan7. Pakistan's Major markets for house linens export are Australia, Netherlands, and Poland. Major destinations include the United States, Germany, Netherlands, and France.
Pakistan is the 5th largest exporter of pure cotton yarn in the world. After exporting $992M in 2019, the country claimed this position7. The primary export homes to this product are China, Bangladesh, Turkey, Portugal, and Japan.
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