Estimation of Export Potential for Pakistan Fayyaz Hussain · Fayyaz Hussain Economist SBP IGC...
Transcript of Estimation of Export Potential for Pakistan Fayyaz Hussain · Fayyaz Hussain Economist SBP IGC...
Estimation of Export Potential for Pakistan
Fayyaz HussainEconomist
SBP IGC Seminar on " Firms and Growth" January 13, 2020, LRC SBP, Karachi
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Pakistan’s share in global exports is on decline
Source: United Nations Comtrade Database
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Egypt Bangladesh Pakistan
Percentage Share in Global Exports
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Malaysia Pakistan Philippines Viet Nam
Percentage Share in Global Exports
Product share of PK exports and their world counterpart
3Source: United Nations Comtrade Database
% in Pakistan total exports % in world total exports
2003-06 2007-10 2011-14 2015-18 2003-06 2007-10 2011-14 2015-18
Animal and vegetable oils, fats and waxes 0.5 0.6 0.7 0.2 0.4 0.5 0.6 0.6
Beverages and tobacco 0.2 0.1 0.2 0.1 0.8 0.8 0.8 0.9
Chemicals and related products, n.e.s. 2.5 3.4 4.2 4.3 10.5 10.8 10.6 11.5
Commodities and transactions not classified elsewhere 0.1 0.1 0.3 0.0 4.7 4.8 5.3 6.2
Crude materials, inedible, except fuels 1.9 2.8 4.4 2.9 3.2 3.6 4.0 3.7
Food and live animals 10.4 14.8 17.7 18.7 5.2 5.5 5.9 6.6
Machinery and transport equipment 2.2 3.1 1.6 1.6 37.9 35.0 32.7 36.4
Manufactured goods classified chiefly by material 50.2 43.9 42.8 41.4 14.0 13.4 12.4 12.3
Mineral fuels, lubricants and related materials 3.4 5.3 2.8 1.3 11.6 14.5 16.6 10.0
Miscellaneous manufactured articles 28.6 26.0 25.3 29.5 11.7 11.0 11.1 11.8
Highest Lowest
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
Technological Classification of Pakistan’s Exports
Source: State Bank of Pakistan
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Shar
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Low technology Commodities Natural resource based manufacturing Medium technology High technology
Pakistan is loosing its comparative advantage overtime
Source: State Bank of Pakistan
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No
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HS6
Total Exports: Items Count having comparative advantage (RCA >1 )
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No
. of
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S6
Commodities High technologyLow technology Medium technologyNatrural resource base
Technological classification: Items Count having comparative advantage (RCA >1 )
Potential Export Items from Supply Side
Comparative advantage revealed in low tech and commodities
Source: State Bank of Pakistan
Woven fabrics, other...
Woven fabrics, mixed principally ...
Bedlinen and related items
Cotton yarn
Woven fabrics of cotton
Leather prepared after tanning or crusting
Matches
Leather apparel and accessories
Made-up articles of textile materials
Gloves, mittens, etc
Men's or boys' suits, ensembles, …
Men's or boys' underpants,and
similar ...
Articles for exercise, other
sports, ...
Women's or girls' suits, ensembles…
T-shirts, singlets and other vests
Babies' garments and clothing accessories
Mattress supports ...
-0.00015
-0.0001
-0.00005
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0.00005
0.0001
0.00015
-20 0 20 40 60 80 100 120 140 160 180
Wo
rld
dem
and
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ange
(la
st 5
yea
rs)
RCA( last 10 years)
Supply Side
Bubble sizerepresents share in world trade
High Tech, Commodities, Medium tech, Low Tech, Natural Resource
Potential Export Items from Demand Side
World demand is rising faster for high and medium tech exports
Source: State Bank of Pakistan
Electronic integrated circuits
Telephone sets
Human and animal blood
Parts of aircraft and spacecraft Medicaments
Footwear
Women's or girls' suits, ensembles, jackets, etc…
Jerseys, pullovers, and similar articles
Men's or boys' suits, ensembles, jackets, etc…
Motor cars and vehicles
Parts and accessories for larger motor vehicles
Turbojets, turbopropellers and other gas turbines
Instruments /appli. for medical purposes
Polyacetals, other polyethers Ceramic sinks, washbasins, etc
Dates, figs, guavas, mangoes, etc,
Oils and other products
-0.05
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Wo
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dem
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RCA (last 10 years)
Demand SideBubble size represents share in world tradeHigh Tech, Medium Tech, Low Tech,
Commodities, Natural Resource
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
Thank You