The Advisor to PM on Commerce and Investment, Mr. Abdul Razak Dawood, held a consultative meeting at Ministry of Commerce to discuss Pakistan’s Global Trade in Services for the First Half of the Financial Year (FY) 2020-21 which was also attended by the officials of the Ministry of Commerce (MOC).
The Advisor was informed that during the period July to December 2020, Pakistan’s total export of services stood at USD 2.844 billion as compared to USD 2.835 billion during the same period in the previous year. He was also informed that the import of services declined by 15.7% to USD 3.821 billion during July to December 2020 as compared to July to December 2019.
He was informed that significant growth has been seen in Insurance & Pension services which grew by 21%, Financial Services by 26%, “Telecommunication & ICT” services by 40% and Other Business Services (like Consultancies) by 2%. He was also informed that because of the COVID-19 pandemic, Travel and Transport Services exports were adversely affected showing negative growth of 28% and 18% respectively. However, these sectors are likely to improve once the pandemic subsides.
Mr. Dawood noted with satisfaction that during the period July to December 2020, Pakistan’s services exports have finally turned around and have started to show positive growth. He said that Services play an important role in everyday life. They have a central place in both domestic and international economies and account for the bulk of global Foreign Direct Investment (FDI) and trade. He said that Services connect countries to the international trading system by facilitating supply chains and e-commerce.
He was of the view that the most significant increase in exports of Services was in “Telecommunication & ICT” services which increased by 40% to USD 958 million during July to December 2020 as compared to USD 684 million in the same period the previous year. “The ICT Exports will soon become a very important sector in Pakistan total exports and I am optimistic that these would cross the USD 2 billion mark in the current financial year”, he said.
Mr. Dawood noted with satisfaction that the trade balance in the Services sector has improved significantly during the first six months of the current financial year. The trade balance stood at USD -977 million during July to December 2020 as compared to USD -1,697 million during the same period in the previous year, thereby showing an improvement of 42%. He said that this would contribute significantly to the improvement of Current Account Deficit.
He was also told that all over the world, workers remittances are included in the export of services as they come under the Mode 4 of the World Trade Organisation (WTO) classification of Services Exports which relates to the presence of natural persons of a Member in the territory of any other Member. He was informed that the true impact of services export of Pakistan can be conceived completely workers remittances were also included in the export of services as per the WTO practice.
He commended the presentation of the facts and figures relating to services trade by the relevant officials of the Ministry of Commerce. He urged them that in order to increase the services exports of Pakistan, new markets have to be found for our exports of services. He also advised the Trade Development Authority of Pakistan (TDAP) to focus on export promotion of services. He was of the view that the market access and export promotion of services has to go hand-in-hand in a synchronised manner. He also advised the MOC and TDAP to go an extra mile for facilitation of the export of ICT services.
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