The Shehbaz Sharif government would badly like to claim that the good news of the continued rise in exports was due to its expert economic handling, but the truth is that exports are one of the factors that governments do not control. The most that can be done is to prevent government policies actually discouraging exports. The exports are increasing because the wave of inflation in the world seems to be coming to an end. As a result, there has been enough of an increase in demand for there to be an increase in international orders, which is one reason for the rise in exports. Another reason is supposed to be the stability of the exchange rate. That has been helpful to both exporters and their customers abroad in determining prices. The improvement in exports means that downward pressure on the rupee would be less, and thus it would be possible to maintain price stability. Of importance is the fact that August imports did not just grow over August last year, but over this May. At this point, exports are on a positive trajectory.
However, there should be pause to consider what Pakistan sells to the world. It has to buy fuel, edible oil and pharmaceuticals. In return, it does not have a monopoly over anything it sells. Even in the growth area the government has identified, IT, it faces a slew of competition. Yet the only way it can dig itself out of the hole it is in is by increasing its exports so that it can find the wherewithal to pay off its debts and escape the debt trap it is in. It is not enough to export; the government must also extract enough taxes so that it can buy the foreign exchange earned.
However, at this stage, the increase in exports in a positive development, and should silence the voices of the sugar lobby, which wants to export a notional surplus, which the Cabinet decided against on Wednesday, overturning a decision of the Economic Coordination Committee. The last time sugar was exported, under the PTI government, it ended badly. There may be a need for foreign exchange, but it is not so dire, that the government need cut off its nose to spite its face. There was widespread unrest at the price rise that the sugar shortage caused, and price hikes are not something the present government will risk, especially if it is avoidable.
