Exports can be the backbone of any economy as they significantly improve a country’s GDP. With lifting trade restrictions and increasing globalization, there are several paths to boost exports of a region. The important questions include what to export, which markets to choose, and how to export the products or services. Pakistan’s government is facing dilemmas in decision-making to form the right policy for improved exports.

Pakistan is struggling with reduced exports of its goods due to several factors. According to Statista, in 2020, the value of goods exported from Pakistan was worth 21.96 billion USD. However, these exports of goods have dropped from 23.33 billion USD in 2019. The figure below shows the history of exports from 2010 to 2020 to reveal the roller coaster ride Pakistan’s economy went through in a decade.

Source: Statista

Undoubtedly, COVID-19 played a role in undermining exports, but this could be controlled with the correct policy formation. Still, it becomes essential to consider e-services and eCommerce, which can assist in improving exports.

Role of eCommerce to Boost Exports

Lifting the international trade barriers is essential to increasing eCommerce’s regional scope. Ecommerce can help a business to reach the global market and conduct sales. As a simple phenomenon, if there are fewer trade barriers, the goods can be easily exported to foreign regions. The critical question is, what if, rather than goods, the ICT services have to be shipped to the international market? One can think of many businesses that come to mind with this discussion.

With an increase in eCommerce, there was the introduction of IT and ITeS exports which led to the growth in the region’s exports in the past decade. The statistics can be seen in the below figure, which shows an increase in the overall services of ICT from 2003 to 2018.

Source: Techies

As per the data of State Bank Pakistan, there are over 3.2 million SME units in Pakistan which constitute 90% of the entire enterprise. These contribute to over 30% of the GDP and 25% of the exports. If eCommerce awareness and training are provided to these SMEs, then it is possible that these businesses can reach the global market to enhance Pakistan’s exports.

Ecommerce can help to generate new marketplaces from small regions like rural areas or regions with young people seeking new opportunities to increase their supplies. According to the Macrotrends data, the unemployment rate in Pakistan was 4.30% in 2020. This means that this unemployed population can develop their own eCommerce business online to reach international markets. However, investment in training needs to be provided by the government if this problem needs to be resolved.

 Many people from the young generation have become self-employed freelancers to provide services to regions like the UK, USA, Australia, and many other states. For instance, Pakistan has been the 4th largest supplier of freelance services after the US, Brazil, and the UK. Moreover, freelancing platforms like Fiverr, Upwork, and many others have been mediatory to generate employment for hundreds of Pakistanis by seeking foreign online projects.

In this way, eCommerce can help enhance Pakistan’s exports if the country collaborates with regions open to imports of technology and services. With these platforms, it is no doubt that Pakistan can improve its economic condition. It includes the reduced unemployment rate and the increase in the export of e-services in foreign regions. Thus, it can be argued that eCommerce has become a key to unlocking success towards improving the economy via exports.

Challenges to Improve Exports via eCommerce

While exporting through eCommerce has many benefits, the government can face multiple challenges to kick-start this process.

Lack of trust

Pakistan lacks the technology that can help gain new customers from international platforms. For example, if a simple fashion and apparel company wants to export its product, there can be challenges related to a lack of customer trust. It can be due to a lack of trusted intermediaries to manage faulty products’ returns and handle payments.

Amazon opened its marketplace for Pakistani sellers, but there were many fraud complaints for Pakistani sellers. Platforms like PayPal have not yet been operational in Pakistan to ensure trust. It shows that the government needs to invest in technology to build international customers’ trust. Platforms like Payoneer are currently being used to manage payments.

Training and Awareness building

Training and awareness for the businesses and the young generation can also be essential as this can help provide them with the guidelines to export. The government of Pakistan can teach the benefits of exporting and how their business initiatives can succeed. If the IT and services exports will increase, it is possible that this would contribute to a significant increase in the country’s GDP and per capita income.

In the End

With this discussion, it becomes clear that there is a direct link between eCommerce with an increase in exports to Pakistan. Therefore, the government needs to consider how technologies can be improved and build awareness to increase eCommerce exports.

 

Zeeshan Riaz
Latest posts by Zeeshan Riaz (see all)

Facebook comments

RELATED ARTICLESMORE FROM AUTHOR