Pakistan’s road to export-led growth runs through industrial upgrading, not blanket incentives

Pakistan's path to export-led growth is being hindered by a focus on blanket incentives rather than industrial upgrading, according to Prime Minister Shehbaz Sharif's recent comments. Export promotion, export-led growth, and export-led industrial transformation are three distinct concepts, with the latter requiring sustained investment in technology, productivity, and higher value manufacturing.

The country's policies have primarily concentrated on export promotion through subsidies and concessions to established industries, rather than focusing on industrial development. Despite the Commerce Ministry's Rs25 billion subsidy package for rice exports and similar demands from the textile sector, annual merchandise exports have remained stagnant between $30bn and $32bn in recent years.

The World Bank's Pakistan Development Update highlights the need for continued tariff liberalisation, improved export standards, and greater access to export financing to strengthen competitiveness. However, the exchange rate has lost its meaningful link with export growth, and the country needs a focused industrial policy to reverse de-industrialisation and expand production capacity.

Brief written by urgent.news from Dawn Business's own syndicated text. Machine-written — may contain errors; check the original before relying on it.