One hundred and seventy-three. Remember that number. It is not the price of petrol, not a seat count in the National Assembly, and not the number of committees formed to study why exports are falling.
It is the number of firms that, according to a State Bank firm-level study of Pakistan’s export landscape, handled nearly half of everything this country sold to the world. One hundred and seventy-three companies. You could seat them in a single banquet hall and still have room for the food.
Widen the lens and the picture barely improves. The same data showed roughly 17,000 exporting firms in total, with the top five per cent of them handling three-quarters of all exports.
Seventeen thousand, in a country of over 240 million people. Bangladesh built a garment miracle on thousands of new factories entering world markets; Vietnam turned itself into a workshop of global supply chains. We built a system in which exporting is a members-only club and the membership desk closed years ago.
This is the part of the trade debate nobody wants to have. Every budget season, we argue about how much Pakistan exports. We almost never ask how many Pakistanis export. Economists call these two things the intensive and extensive margins, which is a polite way of saying: are your existing exporters selling more, or are new ones being born?
Pakistan’s entire policy machinery, from rebates to concessional finance, is aimed at the first question. The second one sits in a file somewhere, gathering the dust that all inconvenient questions in Islamabad eventually gather.
Why does the distinction matter? Because the research is brutal on this point. World Bank economists Caroline Freund and Martha Pierola, studying firm data across 32 countries, found that ‘export superstars’, the top one percent of firms, drive more than half of a country’s exports, export growth and diversification.
Superstars are not summoned by ministerial speeches. They emerge from a wide funnel of firms that try exporting, fail, learn, and try again.Narrow the funnel and you get exactly what we have: an export basket where roughly 74 percent is low-value textiles, leather and rice, and where the high-tech share crawled from 3.6 to 6.4 percent over two decades while Vietnam raced to 33.9 percent.
Exports of goods and services languish around ten per cent of GDP. These are not the numbers of a trading nation. These are the numbers of a nation with a trading department.Hayek would have recognised the disease instantly. Exporting is not a policy output; it is knowledge, dispersed and hard-won of buyers, standards, shipping lines and seasons.
That knowledge lives inside firms and it multiplies only when new firms are allowed in to acquire it. Our system does the opposite. Duty exemption and drawback schemes are so complex that, as a World Bank competitiveness note observed, only large firms can afford the paperwork; small firms pay tariff-inflated input prices and give up before their first shipping container.
Build a first-time exporter window that puts drawback claims and export finance within reach of a 20-person workshop in Sialkot, not just a conglomerate in Karachi.We keep asking why exports do not grow. Perhaps the answer is standing outside the banquet hall, uninvited. Trade policy that only talks to 173 firms will keep getting answers from 173 firms. It is time to send out more invitations.
The writer is graduate from NDU and working at Trade/Commercial Section Danish Embassy in Islamabad — [email protected]
