KARACHI: There is a need to shift from an inward-oriented to an outward-oriented economy that puts greater emphasis on exports to achieve high and sustained growth, said State Bank of Pakistan (SBP) Governor Reza Baqir while speaking at ‘Firms and Growth’ seminar on Monday.
He said that one-fourth of the emerging economies have grown at an average rate of seven per cent since 2001. “To reach this average growth rate it was critical for Pakistan to achieve significantly higher export growth,” Baqir said.
The seminar was organised by the SBP, International Growth Center, and Consortium for Development Policy Research and Pakistan Business Council in Karachi.
On the exchange rate, Reza said that addressing exchange rate overvaluation has helped boost country’s exports. While the exchange rate had done its part, more fundamental growth in exports needed to come from structural reforms beyond the exchange rate.
Baqir said the country’s exports had largely remained concentrated in very few sectors and have been on a declining trend since 2012. He added that there is a need to go beyond the traditional commodities of textile and agriculture while highlighting the importance of export diversification.
The seminar was also attended by PM’s Finance Adviser Abdul Hafeez Shaikh, Minister for Planning and Development Asad Umar and representatives from the World Bank. Sheikh also stressed on the need for exports diversification saying that government was committed to work in partnership with the private sector to address the factors which had previously constrained growth.
Minister for Planning and Development Asad Umar said the government is committed for job creation and competitiveness while highlighting governments’ protection of noncompetitive sectors over the last few years which remained detrimental to economic growth.
Speaking at the seminar, International Growth Center Chairperson Dr. Ijaz Nabi pointed out the need for improving export strategy in order to ensure sustainable growth, and the role of fiscal responsibility to avoid recurrent external account crises.
The seminar highlighted importance of creating an outward-looking economy and the different contours of an export-oriented economic strategy that the country would have to adopt in order to remain competitive in the international market, especially with regards to countries such as India and Bangladesh.