Pakistan’s Export Delusion |
By December 2025, Pakistan’s export debate should have matured beyond slogans, press releases, and recycled policy promises. Instead, the conversation remains trapped in a familiar loop. Incentives are announced, concessions are extended, and relief packages are branded as reform. Yet the numbers remain stubborn. Pakistan’s merchandise exports continue to fluctuate in the low USD 30 billion range, with year-to-year movements driven largely by currency depreciation, global commodity cycles, and temporary demand shocks rather than any deep improvement in competitiveness. When adjusted for inflation and exchange-rate effects, export volumes show little evidence of sustained expansion. This stagnation is not accidental. It is the logical outcome of an export strategy built on subsidies rather than productivity.
For decades, policymakers assumed that reducing input costs would automatically translate into export growth. Cheaper electricity, subsidized gas, concessional export finance, zero-rating regimes, and selective tax exemptions were expected to compensate for structural weaknesses. What this approach ignored is a basic reality of global trade. International markets reward systems, not sympathy. Export competitiveness is built on productivity per worker, reliability of supply, quality consistency, compliance with standards, and the ability to scale. Pakistan addressed these elements sporadically, if at all.
Regional comparisons now leave little room for ambiguity. Bangladesh has sustained merchandise exports above USD 45 billion, dominated by garments but increasingly diversified into higher-value categories. Vietnam has crossed USD 350 billion in exports, integrating deeply into global supply chains across electronics, textiles, footwear, and industrial manufacturing. These economies did not rely on permanent energy subsidies or open-ended tax exemptions. Their exporters operate under market-based pricing, disciplined labor productivity regimes, predictable regulations, and strict performance expectations. Pakistan chose a softer path and is paying for it.
The structure of Pakistan’s export basket reveals the depth of the problem. Textiles still account for roughly 55 to 60 percent of total exports, but the composition has barely changed in two decades. Yarn,........