The latest reports say Pakistan’s exports stand at $2.1 billion and imports at $4.8 billion. An April 2019 report puts the trade deficit at $2.7 billion. Such a large deficit is clearly not a good sign for the economy. It is nearly half the amount Pakistan has recently agreed to borrow from the International Monetary Fund.
Every country with a functional economy tries to strike a balance between its imports and exports. That way foreign exchange reserves do not become a problem. Most of the developed countries have more exports than their imports. That allows them to build foreign exchange reserves. Mostly their imports consist of raw materials needed for their industrial production, which in the gets exported, often to the countries from which the raw materials were sourced.
Pakistan has a large market, one of the largest in region. It has the infrastructure needed to manufacture products that can both meet local demand and be exported. The government is also willing to provide incentives to exporters. Why is it then that we are not achieving our targets? Why are we unable to even satisfy local consumers who import goods for their daily use? We import all kinds of products, from small needles to giant airplanes, because our manufacturers and traders are unable to produce quality products at competitive prices.
Product quality and competitive price are basic factors in attracting new customers. The most important phase, however, starts after the sale of a product. That is how consumers are retained. The biggest success in business is if your customer or buyer buys your product a second time, or advises a new consumer to consider buying your product on account of its quality and durability.
Most of our competitors are from our neighbourhood; they ensure competitive prices, quality and durability. That is how they retain their clients in the long run. We lag behind in this regard.
The poor quality of our finished goods discourages not only international clients but also our domestic consumers. The consumer market is very fast, ruthless and sensitive. It responds very quickly to new things. There are many competitors in the international market.
Several government departments are trying their level best to promote Pakistani products in the international markets. They provide incentives, arrange participation in international exhibitions and fairs, and create opportunities for manufacturers and exporters to introduce and promote their products at international level. Sadly, many opportunists use these platforms in negative ways.
Public as well as private sector organisations should conduct awareness campaigns for manufacturers, exporters and traders
This is all a government can do for the manufacturers, traders and exporters. The manufacturers and exporters have the responsibility to ensure the promised quality of a product. They must send the same quality of products in consignments as the approved sample. It is because of poor consistency in terms of quality that our e-commerce businesses have failed. The products supplied often failed to match the quality promised online. Many examples of this are on record.
Some other factors too can affect Pakistan’s exports. After overcoming domestic problems, when we succeed in getting an international order, it is the responsibility of our manufacturers and exporters to ensure the quality of product promised to the clients.
Poor quality and bad service encourage domestic consumers to import the products. Te imports thus include garments, footwear, electronics, automobiles, mobile phones, watches, cosmetics, drinks and processed food that are also manufactured, assembled and produced in Pakistan. It is on account of poor quality of domestic products and services that local consumers prefer imported products. In other words, our business community, manufacturers and traders do not realise the importance of retaining consumers.
The bitter truth is that as a nation we have failed to win the confidence of our consumers. This is one of the main reasons why we import costly consumer products and waste our foreign exchange. Our exporters and manufacturers always send high quality samples, but after getting a confirmed order, some of them send low quality products, starting with their very first deal. Why does that happen? It is simply an attempt to become rich quickly by dishonest short cuts. There are many examples on record of importing countries returning shipments from Pakistan on account of poor quality and substandard products. The returned consignments have included rice, fruit, garments and hosiery.
We appear to have forgotten the teachings of our religion. Cheating in business is strictly forbidden and is a grievous sin, but many do it. Not much importance is given to social problems. Some manufacturers still hope to sustain their businesses. We lose foreign exchange, we lose local consumers, we lose the market, and we surrender business opportunities to our competitors, resulting in an increase in imports and pressure on our foreign exchange reserves. We are losing at both ends in terms of a decline in exports and a local market contraction.
The government should blacklist manufacturers, exporters and traders fund to be making low-quality shipments. The practice is damaging the credibility and reputation of our country. Strict legislation can reduce the number of such incidents. The government should also introduce incentives for exporters who retaining their clients. This will help increase exports and ensure maintenance of international standards. We need strict laws, policies and implementation to ensure the quality of products and services.
Public as well as private sector organisations should conduct awareness campaigns for manufacturers, exporters and traders. Large-scale companies are successfully doing their businesses and exporting quality products. Small-scale manufacturers, exporters and traders need some capacity building. At district level, with the collaboration of relevant private sector organisations, the district chamber of commerce can play a vital role. Small-scale business communities must be sensitised about business ethics, importance of quality control.
Being an effective think tank and a research institute, the Sustainable Development Policy Institute [SDPI] is playing a very important role by conducting evidence-based research, seminars, conferences, roundtable meetings, and capacity building workshops on such issues. The SDPI send recommendations to relevant authorities and policy makers. Such platforms can also be utilised to solve the issues mentioned above.
The writer is a research coordinator at the Sustainable Development Policy Institute