Shoring up the Export Front
Aftab H. Wahla
For every economy, whether an advanced or a developing one, exports play a determinant role in bridging – or widening – the trade deficit, and it is directly associated with Current Account Deficit (CAD). In case of Pakistan, management of CAD has direct bearing upon the country’s foreign exchange reserves, stability of exchange rate and debt repayment capabilities. With massive contribution to current account deficit or surplus thereof, tapping the export potential offers time-tested, reliable path for sustained development. It also helps avoid the boom-and-bust cycle that hits Pakistan economy every 4-5 years. Development and diversification of export potential of the country would shift its economy from a consumption-led growth to long-term and sustained export-led development with massive build-up of forex reserves, stable exchange rate and reduced debt-servicing burden. Consequently, low interest rates and enhanced economic activities would help provide a strong base for curtailing unemployment and broadening tax base, and it would also offer huge fiscal space for spending on public development. The centrality of export sector in an economy warrants discussion so as to underline the export potential of Pakistan and unearth different structural and fiscal issues that are impeding the growth of the export sector on an upward trajectory in order to suggest remedies for sustained, long-term growth and development.
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