External Market Conditions, Competitiveness, Diversification, and Pakistan’s Export Performance

Pakistan’s exports evolve broadly in line with total world imports. Accordingly, Pakistan’s share in world imports was remarkably stable during the last 20 years, ranging between a minimum of 0.12 percent in 1980 and a maximum of 0.18 percent in 1992. In 1999-2000, the share was 0.15 percent. This would suggest that Pakistan’s export performance was not worse than that of the world on average. Compared to regional competitors, however, the performance was unimpressive, especially when compared to China and Thailand throughout the 1980s and 1990s or compared to Bangladesh, India, and Sri Lanka during the 1990s. All these countries succeeded in achieving sustainable market share increases in total world imports (Figure 1). In light of the growing awareness about the importance of exports in the overall economy of Pakistan and in view of the unimpressive export performance of Pakistan vis-à-vis other countries in the region it would be interesting to study the export performance of Pakistan and analyse the possible reasons for this poor performance and see whether it is due to demand deficiency or is it something to do with the supply side of the issue.