Zafar Iqbal
Pakistan’s economy has a recurring disease. It is not inflation, though inflation wounds. It is not debt, though debt suffocates. The disease is something quieter and more stubborn: the inability to export enough. And the tragedy is not that we do not know the cure. The tragedy is that we have known it for decades and still refuse to administer it.
The recent consultative session at the Ministry of Commerce, where value-added textile and apparel exporters sat across from Commerce Minister Jam Kamal Khan, was revealing. Not because of what was said, but because of what has been said before. The same grievances. The same structural complaints. The same list of impediments that industry has been presenting to government for years, perhaps for generations.
Representatives from the Pakistan Hosiery Manufacturers and Exporters Association, PRGMEA, the Pakistan Textile Council, PTEA and others came not with fresh demands but with old wounds. Upfront taxes that drain liquidity before a single shipment clears port. Energy tariffs so high they make Pakistani products uncompetitive before they reach any market. Pending refunds that lock up working capital for months. Credit constraints under the Export Finance Scheme. And above all, a policy environment so unstable that no exporter can plan with confidence beyond the next quarter.
These are not minor complaints. These are the load-bearing walls of the export problem. And they are crumbling.
Consider the liquidity issue alone. When the state demands upfront taxation from exporters and then delays refunds, it is effectively lending itself money at the exporter’s expense. For large conglomerates, this is painful. For small and medium manufacturers in value-added textiles, it is often fatal. They borrow at Pakistan’s punishing domestic interest rates to bridge the gap. Then energy costs eat into whatever margin remains. The exporter is left running in place, exhausted, producing but not prospering.
Now compare this to what our regional competitors offer their exporters. Bangladesh has built its entire garment industry on the foundation of predictable facilitation, cost discipline and long-term policy commitment. Vietnam has done the same. Even India, for all its bureaucratic complexity, structures its export incentive regime with a consistency that Pakistan has never managed to sustain. Our industry’s plea for alignment with regional peers is not a rhetorical flourish. It is a survival demand.
The Export Finance Scheme, which should function as an enabler, has become another source of frustration. When access to working capital is restricted, exporters cannot confidently scale up orders or pursue new markets. The proposal to standardise the acceptance of foreign master letters of credit as collateral for back-to-back LCs sounds technical, but its implications are deeply practical. Inconsistency among commercial banks forces exporters to spend time and energy navigating administrative uncertainty rather than manufacturing and selling.
Then there is the silent killer: policy instability. Export contracts are signed months in advance. Pricing decisions are made on the basis of known costs, including energy tariffs, input taxes and financial charges. When any of these variables shifts abruptly, margins disappear overnight. International buyers value reliability above almost everything else. Volatility sends them elsewhere. Pakistan has lost buyers not because of poor product quality but because of the unpredictability of the environment behind the product.
The minister’s response, that proposals would be categorised into immediate, budget-linked and structural reforms, is welcome in tone. Technical committees have been formed. But intent without an implementation clock is only intention. Pakistan has had committees before. Pakistan has had committees about committees. What has been missing is the disciplined follow-through that converts good meetings into measurable change.
The deeper issue is strategic inertia. Pakistan possesses a vertically integrated textile supply chain that most developing economies would envy. Raw cotton, yarn, fabric, stitching, finishing: the entire value chain sits within our borders. And yet, despite this structural advantage, export earnings remain modest relative to our population, our industrial base and our potential. We have not translated integration into diversification. We have not translated capacity into consistent growth.
Meanwhile, remittances continue to carry a weight they were never designed to bear. They stabilise the current account in ways that paper over the export deficit rather than address it. Foreign direct investment remains weak, partly because investors are watching the same policy instability that frustrates exporters. The signals they receive and the signals exporters receive are, at their core, the same signal: Pakistan is not yet a safe place to commit to long-term.
The global context makes this more urgent, not less. Trade patterns are being redrawn at a pace not seen in decades. Countries are pursuing bilateral agreements, restructuring supply chains and forming sector-specific partnerships with strategic speed. Strategic trade policy is no longer a secondary consideration; it is at the centre of national planning in every country that intends to matter economically in the decades ahead. Against this backdrop, Pakistan’s recurring debate over refund delays and credit ceilings is not just frustrating. It is disproportionately small.
These are administrative bottlenecks. They should have been resolved years ago. Their persistence is not evidence of difficulty. It is evidence of insufficient political will.
Exports do not rise through slogans. They rise through coordinated, sustained action among the commerce ministry, the State Bank, tax authorities and energy regulators. They rise when policy stability is measured in years rather than quarters. They rise when the state treats exporters as generators of foreign exchange rather than as a source of short-term fiscal relief.
Pakistan has been through enough crises to know the lesson by heart. Every balance-of-payments emergency ends with the same admission: we must export more. Every stabilisation programme creates the same urgency. And then the urgency fades, the committees disperse and the next meeting is scheduled where the same exporters will bring the same list.
The distance between rhetoric and resolve is measurable. It will be visible when the complaints raised in that ministry meeting begin, one by one, to disappear. Not through announcement but through action. Not through assurance but through result.
Until that day, export acceleration will remain what it has always been in Pakistan: a promise deferred.
