By Tanveer Ahmed
KARACHI: Pakistan suffered less as compared to neighboring India in terms of negative growth in exports owing to the global financial crisis that has sent shockwaves throughout the world.
However when compared with Bangladesh, which is among the top competitors of the country in textile and clothing, the damage was higher due to global economic recession.
A comparative analysis of exports in first five months of current financial year shows that the average negative growth in the exports of the country was 3.72 percent, lesser than the India, which saw 6.64 percent negative growth in its exports during the same month.
Normally during the Christmas time, the exports of textile, toys and other goods from developing countries spikes on higher spending due to the festival, however, this time it proved to be sluggish one due to financial crunch, which resulted in the cancellation of orders amid eroded buying power, rising unemployment and recession in the developing countries.
According to local exporters, the exports began this current fiscal year with a positive and encouraging outlook when in July the export proceeds were up over the previous year.
However the world-wide recession has taken its toll on the exports of developing countries, as the exports of all of the countries witnessed negative growth during the said period.
A quick glance shows that Turkey suffered 3.48 percent negative growth during this period, Indonesia 6.58 percent and Thailand 6.08 percent because of the global crisis. China, the export giant, is also bearing the brunt of this problem in the shape of decreasing exports, which declined by around 2 percent. In case of Bangladesh, the average negative growth in export during July-November 2008 was 1.39 percent.
North America and Europe- the countries from which this crisis emanated- are major markets of the exports of developing countries. The major export items are of textile and clothing, which are usually imported in bulk during the said months for the Christmas event.
"Pakistan is no exception to this global financial crunch. However, it suffered comparatively less to other countries especially India," an official of Trade Development Authority of Pakistan (TDAP) said. Exporters said that global economic slowdown proved last nail in the coffin of exports, which were already battling to keep their market share intact because of high cost of production.
However, massive rupee depreciation against the dollar helped the local exports to make up their losses by some extent. Rupee depreciated 23 percent against the greenback during 2008. The exporters were able to make profits--thanks to the rupee devaluation, which although had some negative repercussions on the economy, provided some respite to the exporters, analysts pointed out.