• Sunday, September 24, 2017

Suggestions to Stimulate Pakistan's Export Based Industries.

Discussion in 'Pakistan Economy' started by AhsanAmin, Apr 14, 2017.

  1. AhsanAmin

    AhsanAmin FULL MEMBER

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    Pakistan's exports have been declining continuously for past few years. For a country like Pakistan that already faces a very huge trade deficit, this is a very alarming situation since our imports continue to increase simultaneously at a very high rate causing a growing trade deficit every year. The trade imbalance also affects our exchange rate causing all sort of other problems. I do believe that we can reverse this diminishing exports scenario with some honest, systematic and concerted effort. I have tried to give a few suggestions towards the goal of sharply increasing Pakistan's exports by taking the right steps and making the right effort.
    I would like to divide this export trade promotion effort into a few salient categories.

    1. Awareness of different needs, trends and tastes of foreign consumers in each of the target importing countries. This knowledge of consumer trends would vary country by country. In order to be successful in foreign markets, it is very important that our industrialists and exporters produce goods that meet the high quality demands of the foreign consumers while conforming to taste and style appreciated by the foreign consumers in each particular export country all at very competitive prices.

    2. Need for strong and systematic marketing effort particularly in many new markets.

    3. Need for introduction of right modern technologies that would make our export products both value added and competitive in foreign markets.

    4. Efforts towards giving the industry workers right skills that they could easily manufacture products conforming to tastes and trends of foreign consumers in each different country.

    5. Encouraging knowledge based consultancies that would keep exporters abreast of changing trends in importing and exporting foreign countries related to all of the above salient points and would advise industries and related infrastructure that could help and make it very easy for the decision makers in those industries to take the right steps towards successfully making appropriate changes to their industrial businesses so as to thrive in international export markets.

    Now I will attempt to give suggestions about how to take practical steps towards each of the above salient export enhancement and promotion effort categories.

    1. I believe it is extremely crucial that our exporters are very aware of local demands, specific styles appreciated by foreign consumers in each country in their particular export goods market and are knowledgeable about foreign consumer tastes in their product categories. I think lack of this knowledge is one of the major hurdles behind inability of our exporters to succeed in many foreign markets. Government has to make research centers with the help of trade bodies like APTMA (and others) that would hire competent professionals to analyze these trends in every foreign market. For each of the various textile sub categories, sports goods, surgery tools, furniture, and other export markets, our government and research centers have to make sure that they subscribe every single trade and consumer/fashion trends related magazine and related journals from each country of the world and also look at internet resources that could help identify these target export products related social/fashion trends in markets of interest in every foreign country. These research centers would try to collect as much trade data about international trade activity in different trade categories of interest as possible. These research centers should send qualified, competent and trained professionals to trade fairs in major countries to analyze the changing international trends in every country both related to export activity from competitor countries and import activity from importers from each particular country. The research center professionals and other consultancy outfits could then continuously make recommendations about changing consumer needs/social/fashion trends in every country and guide the industry in making appropriate changes to their products or industrial processes in order to succeed in each particular export market.

    2. These research centers and other consultancy outfits should collect data about all importers and other trade players in market for export goods categories of interest from all different countries. This could also be done with the help of embassies in foreign countries who could contact local trade bodies in foreign countries to collect this data. Research centers would also find out what are the right marketing modes to approach importers in each of the foreign country of interest and advise about other local cultural aspects of business dealings throughout the marketing effort and later export activity. Aided by this knowledge, many times successful exporters would be able to make inroads into several new and less traditional export markets.

    3. These research centers and consultancy outfits would also try to stay abreast of industrial machinery technology and industrial processes enhancements again by hiring talented professionals and subscribing to all major print and internet resources across the world related to industrial technology for a particular exports goods category so that they could help various industrial groups to modernize or make other appropriate changes to meet the changing customer demands in each of the country.

    4. I believe it is extremely important to give the right skills to large number of workers so they understand the style of products appreciated in each of the various foreign countries. Gujrat city, for example, is famous for its unique furniture in our country. Tevta could hire experienced staff that could train already expert furniture artisans in understanding the types, styles and other aesthetic aspects of furniture appreciated in more developed countries of the world so they become innovative and experts in producing furniture that could be exported to particular target countries(these artisans do not need advanced degrees to master this art). Similar efforts could be made to train staff in various textile and other exports goods categories where we already have a strong industrial infrastructure. There are various colleges that train students in textile design but it would be more productive if they could hire staff that would be expert in textile design trends in various countries and could train their students in innovative textile design and related aesthetic aspects so that they design textile products that would be appreciated by the people of particular country. I believe similar effort could be made by other training schools and bodies related to other trades where we have a meaningful export activity.

    5. I think there are strong opportunities for highly educated, talented, and hardworking professionals in various export related trades to found successful consultancies that would help and advise other export oriented businesses so as to make them aware of changing trends in the international trade markets, help them in strategic decision making process and provide all related technical and other knowledge so that export businesses could easily make all changes required to succeed in foreign markets.
     
    Last edited: Apr 14, 2017
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  2. ziaulislam

    ziaulislam SENIOR MEMBER

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    just one will do
    we need realize that there things besides cotton and textile
    we are sitting next to largest vegetable and meat market the GCC aand we are doing nothing, exports are even possible via ship from pakistan which iss very cheap
     
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  3. somebozo

    somebozo ELITE MEMBER

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    60% duties and taxes on imports of material, duties and taxes on machinery..where as neighboring dubai has zero rated free zones..who will come and invest in Pakistan and how will our exports be competitive..what ever Pakistan can export beside agriculture derived product...can be had much cheaper and better quality from Dubai or China...Pakistan needs tax reforms and reduction in insane duties and taxes..Pakistan industry is running on 40 year old obsolete machinery now..

    Even with 20% taxes and expensive foreign labor..Saudi is still far more competitive to start a factory than Pakistan...

    Pakistan needs seriously reform but above all duties and taxes need to be done away as legal form of extortion.

    Thanks to Bhutto..who bought the agrarians into parliament..we are doomed to be a agrarian country now.
     
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  4. prashantazazel

    prashantazazel FULL MEMBER

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    Follow dubai model for Gwadar.
     
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  5. RazaGujjar

    RazaGujjar FULL MEMBER

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    Once our energy needs are met and CPEC is in full operation. It is realistic to believe our exports will increase drastically. We have the potential to cut into the meat/milk market that india currently enjoys.
     
  6. Verve

    Verve SENIOR MEMBER

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    This is all well and good but small businesses make the backbone of any country and have the highest employment as well.

    We need to focus on making the environment for small businesses to thrive and right now such an environment doesn't exist.
     
  7. Little Falcon

    Little Falcon FULL MEMBER

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    We need to:

    1. Build different industrial and commercial zones with all facilities.
    2. Reducing taxes
    3. Subsidizing
    4. Import tariffs
    5. Nationalizing Low performing Industries
    6. LAW AND ORDER
    7. Ease Laws
    8. Keep Industries and business in check
    9. Improve Education System
    10. Keep Business and Politics separate. i.e Don't elect businessman as M.P.A or above.
    11. Importing Resources not available locally at cheaper rate.
    12. Then: tertiary Industry
     
  8. Super Falcon

    Super Falcon ELITE MEMBER

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    I personally work in port in Karachi approximately 50 to 70 export daily passing through my own hands which is very very less
     
  9. madokafc

    madokafc SENIOR MEMBER

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    hmm should made short term efforts and the long terms ones

    For short term efforts, Pakistani rupee must be weakened to the extent to discourage import and driving export urge. Giving more incentive like tax holiday for export oriented companies. Cut dwelling times in harbor and so on

    For long term plan, all of u had imagining it above
     
  10. AhsanAmin

    AhsanAmin FULL MEMBER

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    Yes, this is very right for some developed European countries. This is mainly because small businesses there historically excelled in special crafts and this special craftsmanship in certain industries/trades became just as much a part of their culture. We do not have such special activity like we see in some European countries except in some of our very enterprising cities. For example In Sialkot, sports goods industry, surgical instruments industry and many other export related industries have become part of the culture of the city and there are many small and medium sized businesses who greatly contribute to industrial activity in the city and in our larger country.
    In order to promote such small and medium sized businesses activity, we should try to find out what is special about Sialkot city that it has so many successful medium sized export businesses and later consider how we can promote similar enterprising culture and industrial ecosystem in other cities of our country.
    Let us see what is special about Sialkot city.
    1. The city has a large pool of very skilled labor that knows well how to work very productively in various export industries to make great quality products.
    2. The businessmen and industrialists of the city are connected to large customers in many different countries of the world which makes it very easy for them to get export orders once a business relationship and associated trust has been established.
    3. Businessmen have enough capital to invest in acquiring new technology required to fulfill the quality demands of foreign customers and compete with other foreign competitors.
    I believe historical development of successful Sialkot business culture is a manifestation of flying geese pattern which developed in Sialkot quite early in the history of our country. Some people had the right skills and made enough connections to start exporting sports and other goods. Due to good craftsmanship, they got a very good response for their products and their businesses expanded and then businesses had to work (by employing existing craftsmen) on giving right skills in those crafts to many other residents of the city. Abundant supply of skilled labor encouraged other businessmen to invest in setting up more export businesses and slowly there emerged a great ecosystem of large number of medium sized businesses and a huge pool of very skilled labor.
    We should try to develop Sialkot-like small and medium business industrial ecosystem in other cities of our country. It would require a great effort at the start but once we would have developed appropriate culture and business ecosystem, it would be very simple to continue to improve on the existing ecosystem and make guided and controlled efforts to take it towards more success.
    In order to succeed, we would need an abundant supply of very skilled labor (Incidentally this holds for both advanced technology and traditional businesses). I believe this is one of the things that Sialkot city had very early and this historically led to development of great export culture and made the city a hub for export activity in several trades. Though this is not very easy but great craftsmen in target industries can be trained with concerted and planned effort.
    @Verve, I will try to organize my thoughts more clearly and attempt to give possibly meaningful suggestions on how we can develop Sialkot-like enterprising culture in our other cities.
     
    Last edited: Apr 16, 2017
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  11. The Accountant

    The Accountant SENIOR MEMBER

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    Guys
    Guys to the authorities i would like to say just compute export proceeds to volume ratio and you will notice a decline ... issue is not of decreasing export but of under invoicing and receiving money through hundi ...
     
  12. AhsanAmin

    AhsanAmin FULL MEMBER

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    Thinking a bit more, I realized that a proper and systematic design of products conforming to foreign/local taste and style and what is in vogue there and related export promotion effort would usually/ideally require a clearer division of roles and associated skills. Our vocational schools like Tevta could, for example, train expert artisans of enterprising cities in manufacturing of foreign style furniture giving them right technical skills required to prepare the appropriate foreign style furniture while there would be other artists and experts who would actually design and compose the themes and other elaborate furniture details conforming to foreign/local styles in various countries. I believe There is great opportunity for art and related design colleges to hire expert professors familiar with foreign arts and culture and aware of changing foreign trends in their area of interest who would later train bright students with artistic aptitude and give them right skills to be able to prepare great artistic products in furniture, textiles and so many other product categories. This is the category of students/professionals who would need to actually do all the design work themselves. Then there could be a third category of students/professionals who would have appropriate analytical skills in various arts and related product design and they would analyze the developments and trends in foreign countries for certain products using various print and internet media, trade fairs and other exchange of ideas with peers and they would help prepare the company strategy for new products, and product changes required for marketing in certain countries while helping the business strategy evolve with evolving fashion trends in the existing product markets. These analytical aptitude professionals would work with both company business strategy development experts and artists and would guide the artists about how to change the theme and design details of the products and would do all the research that could simply be explained to artists in developing new innovative designs suitable for evolving trends in foreign/local markets. At least, they would do most of the initial ground work that would make it easier for the artists to understand the trends, do more involved research creatively projecting the ideas into future themes and later help the artists prepare new innovative and artistic products. Actual marketing in foreign countries could later be done by another group of experts who would have been trained with knowledge and skills about business promotion in foreign countries and who would introduce their businesses to prospective foreign customers and have acquired business promotion and relationship management skills. So running a successful export business would usually be a multidisciplinary effort that would involve skilled technicians and workers, brilliant artists, company strategists, foreign fashion and related trends analysts, and foreign marketing experts. I would also want to add some other industrial technology experts who would, from time to time, guide on most appropriate and cost-effective cutting edge industrial technologies(in line with the future company strategy) that might have to be acquired to update the industrial processes according to changing design and foreign customer needs and be able to easily compete with other businesses from different countries.
    I do think that textile bodies like APTMA should work out all relevant details and make some plans to introduce such comprehensive export promotion and management skills to their member industries and businesses. Though exporters of Sialkot are very successful entrepreneurs, some systematic and analytical procedures along the lines of previous paragraph could also greatly help them after they have adjusted the ideas to make the ideas relevant to their particular line of business.
     
    Last edited: Apr 17, 2017
  13. AhsanAmin

    AhsanAmin FULL MEMBER

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    I think there is also great opportunity for local management consultancy firms to promote export business process management and related export business promotion if they can successfully master all the relevant details that are needed to make export businesses successful. In Pakistan, there is enormous opportunity in so many export product categories where management consultancy firms can guide after doing all the required basic groundwork. This is not an area where management consultancy firms have been traditionally active but I believe there is far more opportunity for enterprising management consultants in these new areas if they can actually master the relevant details and successfully help promote the exports as compared to consultancy activity they have traditionally been doing in our country. Of course, there is no free lunch and business consultants would have to work very hard to work out every detail in how to acquire and later transfer knowledge regarding export business process promotion and management for various countries and their fees/rewards should be tied to actual degree of turnaround in business revenue they have been able to generate due to their services and related advice.
     
    Last edited: Apr 17, 2017
  14. AhsanAmin

    AhsanAmin FULL MEMBER

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    I would try to make some better well thought out suggestions later but I have this thing to say about promotion of small businesses. I believe that universities should teach two courses on entrepreneurship. One course would be related to general entrepreneurship and the second course would be related to specific technical entrepreneurship in which the student has majored. There should also be a course about small business management something that would be specific to running the affairs of small businesses and different from corporate management usually taught to management students. The entrepreneurship courses would teach case studies or examples of successful and failed small businesses. They would encourage the students how they can succeed by taking the right decisions and give them analytical and other general business skills for doing the right things and identifying opportunity as a small business after graduation or in some other small business capacity. Many students just do not think of the possibility that they can easily be far more successful than their counterparts that get hired by large firms if the students who start their own small business handle the business intelligently. Many other graduates remain unemployed since their universe of possibilities simply do not have the idea of small business entrepreneurship in bad times when the country's economy is not growing fast enough to give a job to every graduate and when they have to make it on their own. They can still be easily successful if they have the awareness and confidence that they can in fact make it on their own if they wish and become successful as opposed to staying unemployed when the economy fails to create enough jobs. In a country like Pakistan we see possibility of social crises when large number of graduates do not get hired. Government tries to help the graduates with loans for small business but it is even more important that they have the confidence to succeed and have the right skills to run the small business on their own and this has to be taught in the university possibly in the final year. Even if the students want to run their family business and do not want to get a job due to their joining the family businesses, the courses on entrepreneurship would be perfect to give these students new perspectives on how to make their family businesses very successful.
     
  15. Verve

    Verve SENIOR MEMBER

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    @AhsanAmin Brother, it is very difficult for me to read a massive paragraph. If you can edit your posts into multiple paragraphs then it becomes easier to digest for some output.
     
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