Global Rice News

Pakistan’s reliance on primary export resources and its limited market diversification have hindered its global competitiveness and trade share compared to its regional counterparts. However, the China-Pakistan Economic Corridor (CPEC) is expected to play a crucial role in revitalizing Pakistan’s industrial sector and boosting exports.

Rafiullah Kakar, a member of the development projects committee at the Ministry of Planning, Development and Special Initiatives, emphasized that CPEC has the potential to stimulate industrial rejuvenation through special economic zones and infrastructure investments. China has emerged as the leading investor, injecting $25.4 billion into the Pakistani economy in the past decade. Energy projects, with 14 already completed and more underway, have increased Pakistan’s power generation capacity and spurred economic activity.

Transportation infrastructure developments, including highways and connectivity to major ports, are expected to improve trade efficiency. Kakar highlighted the nine planned special economic zones, which offer tax exemptions and logistical support, as promising investment opportunities for industrial growth. Streamlined regulatory frameworks also demonstrate a commitment to sustainable development.

Despite these initiatives, Pakistan’s export growth has been stagnant, with its global trade share decreasing from 0.15% to 0.12% between 2005 and 2022. Muhammad Ashfaq, a joint secretary at the Ministry of Commerce, identified limited diversification in export products and target markets as critical issues in the export sector.

For decades, Pakistan has heavily relied on primary resources like cotton fabrics, rice, and animal skins for exports. Additionally, export destinations are concentrated in the Middle East, with rice being a major export. The USA, Europe, and China dominate Pakistan’s export sector.

In contrast to regional competitors, Pakistan has struggled to shift its export base from raw materials to high-value-added products. While the manufacturing sector’s share in exports has only grown by 16% in the past two decades, regional competitors have achieved an average growth rate of 43%.

Nevertheless, CPEC is expected to enhance market accessibility, regional connectivity, and trade volumes, boosting Pakistan’s economy. To fully harness CPEC’s potential, structural reforms are necessary to address systemic constraints. Prioritizing export diversification, improving market access, and creating an enabling business environment are crucial for long-term sustainability.

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