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2
Pakistan’s share in global exports is on decline
Source: United Nations Comtrade Database
Estimation of Export Potential for Pakistan Fayyaz Hussain - - PowerPoint PPT Presentation
Estimation of Export Potential for Pakistan Fayyaz Hussain - - PowerPoint PPT Presentation
Estimation of Export Potential for Pakistan Fayyaz Hussain Economist SBP IGC Seminar on " Firms and Growth" January 13, 2020, LRC SBP, Karachi Pakistans share in global exports is on decline Source: United Nations Comtrade
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Product share of PK exports and their world counterpart
3
Source: United Nations Comtrade Database
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Methodology: Demand and Supply
We mapped Standard International Trade Classification (SITC) 3 digit codes with HS 6 digits spanning from 2003 to 2018 and categorized HS codes and added technological classification Sanjaya Lall, (2000) UN classification. Following the literature in international economics, revealed comparative advantage is used for assessing exports potential.
Based on RCA, we sorted the HS codes from highest comparative advantage to the least comparative advantage to identify the potential exports items from supply side.
From the demand side analysis, we sorted HS codes based on world’s fastest to slowest growing imports and then identified Pakistan’s potential exports that matched with the world fast growing demand.
RCA = XAi/ XAj
j
XWi/ XWj
j
≥ 1
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Technological Classification of Pakistan’s Exports
Source: State Bank of Pakistan
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Pakistan is loosing its comparative advantage overtime
Source: State Bank of Pakistan
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Exports Potential
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Initial Analysis of Export Potential: Supply Side and Demand Side
Source: State Bank of Pakistan
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Potential Export Items from Supply Side
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Comparative advantage revealed in low tech and commodities
Source: State Bank of Pakistan
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Potential Export Items from Demand Side
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World demand is rising faster for high and medium tech exports
Source: State Bank of Pakistan
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Top 14: Pakistan’s exports potential from demand side
2000 4000 6000 8000 10000 12000 Electrical machinery and equipment Mineral products Prepared foodstuff machinery and mechanical appliances medical or surgical instruments and apparatus Toys, games and sports Base metal and articles of base metal Chemicals Plastic and articles Animals and animal's products Vegetable products Textile $ million
Pakistan's Exports potential
Potential Actual exports 2018
Source: State Bank of Pakistan
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Conclusion
- With the given production structure, Pakistan has the potential to double its
exports
- Most of this potential lies in labor intensive low tech products- good for
employment
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