Contribution of exports to GDP declines to 10pc from 16pc in last two decades: Research

ISLAMABAD-The contribution of Pakistan’s exports to the country’s GDP has declined to 10 percent from 16 percent during the last two decades. This finding was made by PIDE researchers and economists in their recent brief titled “What Are the Factors Making Pakistan’s Exports Stagnant? Insight from Literature Review.” Dr Nadeem ul Haque, Vice Chancellor, and Dr Durre Nayab, Pro Vice Chancellor, shed light on the pressing issue of Pakistan’s widening trade deficit, emphasizing the critical role of export competitiveness in the country’s economic landscape.
They underlined key factors that have led to stagnancy in Pakistan’s exports, including low productivity of firms, lack of value addition and innovation, complex incentive mechanisms, limited export destinations, and inadequate investment in research and development. “Lowering exports has emerged as a significant contributor to Pakistan’s persistent trade deficit, posing a multifaceted challenge that has plagued the country since the early 2000s. During the last two decades, the contribution of exports to our GDP has declined from 16% to 10%,” said the research. “Pakistan’s share in global trade has dwindled from 0.15% in 2005 to a mere 0.12% in 2021. This decline in export competitiveness places us at a disadvantage, especially when compared to economies like Bangladesh, India, and Vietnam, which have managed to expand their export capacities.”
According to Dr. Nadeem, “To address the ongoing economic crisis and pave the way for a more resilient future, it is imperative that we strategize rigorously to identify potential markets that align with our exportable products.” It was revealed that Pakistan’s export competitiveness has been waning, particularly when compared to peer countries like Bangladesh, India, Vietnam, and Malaysia. “We have witnessed a decline in our export share on the global stage, a trend that is most concerning when measured against our regional counterparts.” The contrasting trajectories of economies like Bangladesh and Vietnam were discussed in the context of export growth. “Bangladesh, once among the poorest nations, has managed to outpace growth predictions with a robust export-driven economy,” explained Dr Nadeem. “In contrast, our exports have remained stagnant at around 30 billion dollars, posing a significant challenge to our economic outlook,” he added. Dr Nadeem ul Haque concluded, “To overcome the challenges posed by our current economic crisis, we must collaborate across sectors – govt, exporters, and economists – to identify potential markets and align them with our export capabilities. A swift response is crucial in building a thriving economic environment.”

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