Source: Pakistan's Foreign Trade Key Indicators, Ministry of Commerce, Islamabad

The combination of a narrow export base concentrated in low value added products and going to few countries is a source of serious concern for Pakistan. In essence, no trade policy changes or sophisticated policy implementation schemes will play a significant role in increasing exports if the country's export base retains its current status. What is required instead, is a major focus on Pakistan's competitive strength and a consequent diversification of its export base and upgrading of its productive capacity. Trade policy reforms and appropriate implementation programmes will then be able to facilitate an export expansion strategy based on sound fundamentals.

Import Trends
Imports during the first nine years of the decade of the 1990s (1990-91 to 1998-99) grew at an average rate of 4.3 percent per annum. The annual average growth rate during the first half of the decade (1990-91 to 1994-95) was 9.3 percent while in the next four years it declined to an annual average rate of 1.8 percent. However, the average decline during the last three years (1996-97 to 1998-99) was much sharper at about 7 percent per annum. The decline in 1998-99 was to the extent of 6.8 percent which was mainly due to the import compression policy pursued during the year to protect the country's foreign exchange reserves in the aftermath of economic sanctions. The idea was to discourage non-essential imports. The trend in imports since 1990-91 are given in Table 9.9.

* Provisional
Source: Federal Bureau of Statistics

Imports during the current fiscal year (July-April 1999-2000) have registered an increase of 10.9 percent as against a decline of 11.2 percent in the comparable period of last year, increasing from $ 7516.0 million to $ 8337.1 million. The rise in imports was mainly attributed to the higher imports of petroleum group (93.3%), agri/other chemicals group (11.9%), metal group (10.5%) and 'others' (13.5%). On the other hand, the imports of food group and machinery group have declined by 32.0 percent and 7.8 percent respectively. The decline in food group is the outcome of massive fall in both quantity and value of imports of wheat, soyabean & palm oil, sugar and tea. The decline in machinery group has resulted from substantial fall (41.3%) in the import of power generating machinery. However, within the machinery group, the imports of textile machinery and agricultural machinery showed a rise of 10.9 percent and 5.4 percent respectively. The unit values of imports, both for petroleum products and petroleum crude, have increased by 76.3 percent and 91.6 percent respectively, thereby pushing the import bill up by $ 1049.3 million. If the petroleum group is excluded from the overall imports, the remaining non-oil imports have shown a negative growth of 3.6 percent [See Table-9.10]. Hence, the increase in imports was purely POL driven. Excluding food and petroleum groups, the remaining imports have registered a growth of 4.3 percent.

* Provisional
Source: FBS, Islamabad

Imports - Gains/Losses
Pakistan gained $ 321.9 million because of the fall in import prices of items like soybean oil, palm oil, synthetic fiber, medicinal products and iron & steel but these gains were out weighted by the losses incurred due to an increase in the import prices of wheat, petroleum products, crude petroleum and plastic material, which amounted to $ 1041.1 million. Had the unit value of these imports remained at the last year's level, the imports of these items would have been lower by $ 719.2 million and the import growth would have been 1.4 percent instead of 10.9 percent as reported earlier. Details are given in Table-9.11.

* Provisional
Source: FBS & E.A.Wing, Finance Division

Month-Wise Imports
Monthly imports during July-April, 1999-2000 have been higher than the corresponding months of last year with the exception of April, 2000. Imports averaged $ 834.5 million per month during the first ten months of the current fiscal year, as against $ 751.6 million of the comparable period of last year. In other words, on average, imports have been higher by $ 82.9 million per month. The quarter-wise estimates suggest that imports grew by 15.9 percent in the first quarter (July-September), slowed to 8.1 percent in the second quarter (October-December), accelerated to 15.9 percent in the third quarter (January-March) but declined by 5.6 percent in April, 2000. The month and quarter-wise imports are given in Table 9.12.

($ Million)

* Provisional
Source: FBS, Islamabad

Concentration of Imports
Pakistan's imports are highly concentrated in few items namely, fertilizer, petroleum & products, machinery, transport equipments, edible oil, chemicals, iron & steel and tea. These eight categories of imports, on average, accounted for about 75 percent of total imports in the first nine years of the 1990s. Among these categories, petroleum & products, machinery and chemicals accounted for almost 53 percent of total imports. Considerable structural changes have taken place in some categories of imports over time. The principal changes have taken place in the case of petroleum & petroleum products, edible oil and chemicals. While the share of the former has declined, the shares of the later two categories have increased during the 1990s [See Table 9.13]

(Percentage Share)

* excluding transport equipments
Source: Pakistan's Foreign Trade Key Indicators, Ministry of Commerce, Islamabad

Economic Classification of Imports
The composition of Pakistan's imports have undergone little changes over time. The shares of consumer goods and raw material for capital goods have remained almost unchanged during the 1990s. While the share of raw material for consumer goods have increased only marginally, the share of capital goods imports in total imports has fluctuated.

During the first nine months (July-March, 1999-2000) of the current fiscal year, the share of raw material for consumer goods has increased from 47 percent to 53 percent while that of raw material for capital goods remained stagnant at 6 percent. The share of capital goods declined significantly from 31 percent to 26 percent but the share of consumer goods declined marginally. The annual details since 1990-91 to 1999-2000 (July-March) are given in Table-9.14. As stated earlier, the composition of Pakistan's imports have changed only marginally.

(Rs. Million)

* Provisional
Source: Federal Bureau of Statistics, Islamabad