When a country’s external trade deficit rises to a level equal to the total exports, it is time for the officials to sit up and devise remedies on an emergency basis.

The exports, short of their modest targets year after year, were at $7.38 billion in the first five months of this fiscal year while imports had soared to $14.58 billion. The export target for the whole year is a modest $19.215 billion, which is unlikely to be achieved.

And the rise in the trade deficit ending November represents an increase of 32.38 per cent over the same period last year.

The Far Eastern countries became Asian tigers through their phenomenal export growth. They produced far more than they needed or could consume, exported it, re-invested and expanded their economies. But we seem to be moving in the opposite direction and seeking to prosper through stepped up imports without giving any thought to it--- whether the economy can afford it or not.

What we are exporting are largely raw products like rice, leather, fish, mangos and kinno along with low value textiles low-count yarn and coarse cloth and very little of designer fabrics with a brand name that gets good money.In the area of fabrics, the women of Bangladesh are doing far better than Pakistan. Sugar, can be exported, but it is too costly and needs heavy subsidies.

We have the example of China from which we can learn a great deal. Within a short time, China has moved from the basic economies to areas in the high tech and tremendous amount of foreign investment is coming to China and continues to flow.

We have signed a free trade agreement with China which will enable us to have a two way trade of $5 billion in five years. What is likely to happen is that there will be more inflow of goods from China into Pakistan as its goods are cheap and Pakistan’s exports will be small.

The two countries have also formed a Pak-China Investment Company with an initial capital of $200 million. The company should be able to set up several industries on a bilateral basis.

Pakistani businessmen will have to move into the interior of China to explore the market and sell their goods. They should not rely too much on the political goodwill in China. Business should be treated as business and not as a wing of the political relations.

The Americans live on tomorrow’s earnings that may be true to an extent but the American traditions are far different from that of Pakistan’s that has its own problems. Pakistan has been importing wheat and now cotton, edible oil, milk and milk products, meat and tea and other food items. Pakistan is increasingly dependent on imports but doesn’t print the global currency as America does.

We have 160 million people living on a land mass interspersed with mountains and deserts and short of water and power and we have a large number of the unemployed and uneducated workers with a large number of dependents to be taken care of. And they have to be provided employment instead of the richer among them offered credit cards.

The size of the financial sector has risen to Rs6.9 trillion, says the State Bank of Pakistan. How much of that is reflection of the consumer credit and credit cards and how much of that is ill used bank loans?

Dr Ashfaq Hasan Khan, special secretary of finance, says that the foreign exchange reserves at the end of next month will be $16 billion because of new capital inflows. But if the deficits persist, the reserves may be down again.

SBP Governor Dr Shamshad Akhtar says the country will achieve an economic growth of targeted seven per cent this year that gives us a net growth of five per cent after adjusting the population growth of two per cent. But can that growth be achieved when the factories are closing down up-country for want of electricity and farmers are finding it hard to get the right seeds for cultivation of gram and pulses.

Large scale manufacturing has recorded a growth rate of eight per cent. For a seven per cent growth to be achieved this figure ought to be much higher. More so, if employment avenues have to be increased.