Innovating Trade Policy’s Transformation By Salman Sheikh

Pakistan has shown the largest percentage (over 20%) increase in overall research output in 2018. However, this research increase was mostly based on basic research output instead of more proportion of applied research that could have immense applications for the local Pakistani economy.

It is one of the core reasons of our dwindling exports for many years. According to prestigious WEF’s Global Competitive Report 2018, Pakistan ranked 107th out of 140 countries. Likewise, in terms of Global Innovation Index 2018, India stood as the first best country while Pakistan followed far behind at the 8th rank in the South Asia.

There are additional factors contributing to low innovation capability. Our firm level competiveness is too minute and our exporters’ or industrialists’ mindset is too outdated and rent seeker as quoted by a former governor of the SBP.
We need exporters and industrialists, who are young, dynamic and entrepreneurs. Moreover, we need to adopt innovative and competitive import substitution strategy. The HEC and universities should encourage applied research programmes along with significant funding and change scholars’ mindsets towards applied research. For that very reason, our industry/agro-businesses should collaborate with academia (private sector) for applied research projects for firm level competitiveness and innovative import substitution industrialisation. The federal government should create a position of a chief scientific officer, who devises comprehensive and sustainable international trade strategy in consultation with multi-stakeholders, local industry, importers, distributors, exporters, S&T Councils, the HEC and the Planning Commission, and most importantly with the Ministry of Commerce. Business is a dynamic playing field and our imperial but outmoded bureaucracy, whose members are working as trade officers abroad or as commercial section staff in different diplomatic missions of Pakistan, typically has no

capability to find innovative solutions for export performance within limited resources. They frequently complaint that Pakistan has no exportable surplus, that is true in a way, but if a competent trade officer with business development aptitude (a missing link between sales and marketing) from the private sector is appointed in the right host country, he or she can identify inventive solutions to solve the complex issue of export by keeping up spot-on liaison among all stakeholders for the market development of sustainable export. The Ministry of Commerce should recruit more private sector candidates at lucrative market-based packages to attract top talent. In this regard, the Export Development Fund of the Ministry of Commerce should get training for this international trade section from private business schools such as IBA and LUMS, for recruitments, performance evaluations, export marketing (finding untapped markets for our exportable surplus and improving Index of Export Market Penetration) and liaison offices

for comprehensive and sustainable export market development under technocrats instead of inefficient bureaucracy. Besides, we should appoint host country-based local commercial personnel for export promotions who speak in their own languages, network with local people and realise dynamics of the markets. For example, AusTrade has recruited local commercial section officer in Lahore for Australian dairy cows’ export to Pakistan. The officer is Pakistani, speaks Urdu and Punjabi, and fully understands the mindset of local business people. This success story clearly depicted that the company was highly successful in sustainable export market development of their Dairy Livestock Programmes in Pakistan. Similarly, the Ministry of Commerce and the TDAP should adopt innovative strategy for these must do’s. If holistic approach is not supposed to be applied in collaboration with each stakeholder, we cannot significantly increase our exports of goods and services substantially and sustainably.

Published in The Express Tribune, January 21st, 2019.


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