ISLAMABAD, July 4: Pakistan is unlikely to achieve the export target of $17 billion set for the fiscal year 2005-06 owing to low growth in industrial and farm production, officials and analysts told Dawn.

The export is likely to remain short of the target by $300-700 million, which showed that in the absence of real diversification of exportable products plus markets and industrialisation, it would be very difficult for the government to maintain growth in export in the years ahead.

The president and the commerce minister had announced at the inauguration of the Expo 2006 in Karachi that the export proceeds would cross $18 billion by the end of the fiscal year.

The large-scale manufacturing production growth declined to nine per cent during the fiscal year 2005-06 as against 15.6 per cent year last year. While some farm products, which were either exported as a whole or subsequently used in export related products like cotton, have also failed to maintain growth.

According to an official, the government had so far failed to give reasons for the decrease in production of the manufacturing sector. “The government is not even serious to convene a meeting or constitute a body to identify the reasons for this major fall.”

Ironically, the government is only concentrating on providing maximum relief in both taxes and subsidies to only two industries -- automobile and textile. "Our industrial policy just goes around these two sectors. The automobile sector is supposed to meet the domestic demand while the growth in the textile sector is not to that extent as it should be," the official added.

“How can you expect an increase in exports when there are no surpluses in the country?” Commerce Minister Humayun Akhtar Khan asked. Talking to Dawn on telephone from Lahore, Mr Khan said his ministry’s role was to provide preferential market access to the export of surpluses available in the country, adding that his ministry had made many preferential market access agreements with various countries to increase exports to these countries.

Another major reason for the decline in exports was the depreciation of the rupee by around five per cent against the dollar which was not officially notified. But it has also a negative impact on the export proceeds.

Analysts said preferential trade agreements (PTAs), early harvest programme Pakistan so far sighed with various countries were “ill-conceived and not well thought out” agreements, as they did not help in increasing exports to those countries.

This shows that there was no need for quicker PTAs with any country, as in Pakistan’s case it resulted in increasing country’s imports deficit, the analysts added.

A senior office-bearer of the Federation of Pakistan Chambers of Commerce and Industry on condition of anonymity

told Dawn that during the

last two years, no major industry was set up in the country. He said political and security risks, macroeconomic and banking risks and higher cost of doing business were major factors affecting investors’ perception about Pakistan.