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Pakistan Institute of Development Economics, P. O. Box 1091, Islamabad 44000.

© Pakistan Institute of Development

Economics, 2012.

Pakistan Institute of Development Economics

Quaid-i-Azam University Campus

P. O. Box 1091, Islamabad 44000, Pakistan

E-mail: publications@pide.org.pk

Website: http://www.pide.org.pk

Fax: +92-51-9248065

Designed, composed, and finished at the Publications Division, PIDE.

EXPORT BARRIERS IN PAKISTAN: RESULTS FROM FIRM LEVEL SURVEY

JULY 2012

PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS

ISLAMABAD

CONTENTS

Page

Acknowledgements v

1. Introduction 1

2. The Conceptual Framework 3

2.1. The Survey and Questionnaire 4

3. Key Findings of the Survey 7

Reasons for Shortage of Skilled Labour 8

Reduction in Cost if Labour Becomes Productive 9

Duration of Finance 9

Importance of Location 10

Fuel (Electricity and Gas) as a Percentage of

Total Cost 10

Problems Related with Electric Supply 11

Activities and Problems Currently Faced in Exporting

Pre-Shipment Activities 11

Inland Carriage and Handling 12

Customs Clearance 12

Customs Release 13

International Carriage and Handling 13

System of Certification 14

Certification to the Standards/Preparation for

Certification 15

Agreements and Negotiations 15

Effect of Agreements on Business 16

Perception about On-going Dialogues 16

Use of Transportation Mode for Shipment 17

Perception about Efficiency of Institutions 17

Effect of Hindrances on Firms’ Cost 18

Reasons for Failure of Business 18

Quality of Trade Logistics 19

(iv)

Page

Major Constraints to Improving Trade Logistic

Environment 19

Perception about Policy Recommendations 20

Reduction in Cost if Proposed Solutions are

Implemented 20

Regional Distribution as Destination of Exports

4. Summary and Conclusions 21

Appendices 22

References 37

List of Tables

Table 2.1. Ranking of Countries by the Competitive

Industrial Performance (CIP) Index, 2000,

2005 and 2009 6

Table 2.2. Ranking of the Economies on the Ease of Doing

Business 7

1. INTRODUCTION

At a time when many developing countries are rapidly

expanding their exports, Pakistan continues to struggle to accelerate the

exports of manufactured goods. It is generally believed that Pakistan’s

exports are not competitive in the international markets and thus the

country is unable to expand its market share. In particular, the firms

often complain the lack of a conducive investment climate that impedes

business expansion and exports. Against this backdrop, the objective of

this study is to carry out a systematic investigation of the firms’

perceptions on barriers to exports in various productive sectors of the

economy as well as to suggest possible remedies. This analysis is based

on a real time survey of exporters based in Lahore, complemented by a

study of determinants of export performance at the macro level (see

Appendix I).

The conceptual framework of the study is built around the notion

of competitiveness that has been defined as “the set of institutions,

policies, and factors that determine the level of productivity of a

country” (The Global Competitiveness Report 2009–2010). Thus

defined, competitiveness becomes a function of domestic institutional

and policy environment as well as circumstances prevailing in the

global market. On both of these fronts the environment for exporters

has drastically changed during the last three decades. In almost all over

the world the reforms undertaken during the 1980s and later years have

curtailed government interventions in markets and have reduced many

forms of trade barriers. This has created a general atmosphere

favourable to business activities, competitiveness and growth.

Substantial amount of empirical work has been undertaken to

identify factors existing in domestic and foreign markets which

promote or hinder export activities at micro and macro level; see for

example, Belloca and Maiob (2011), Aaby and Slater (1989), Madsen

(1987), and Zou and Stan (1998). For Pakistan, export performance has

been analysed at macro as well as micro level. Akbar and. Naqvi

(2001) analyse determinants of export performance at the country level,

whereas Masakure, Henson and Cranfield (2009), and Din, et al. (2009)

take up these issues at the firm level.

In addition to the studies cited above, there exists a body of

empirical literature that emphasises introspection process regarding

2

internal and external problems as an active element in assessing

hindrances faced by exporters. In such studies perceptions of firms are

directly taken as an important ingredient in the models. Admittedly,

perceptions may deeply be influenced by firms own capabilities and

internal circumstances. However, since entrepreneurs are rational, it

can be safely assumed that there exists a positive correlation between

actual problem and that perceived by the firm, and that any evidence

contrary to this might be an exception rather than rule. Viewed this

way, firms’ perceptions may greatly facilitate our understanding of the

actual problems faced by firms.

Some researchers analyse the difference between the perceptions

of exporting and non-exporting firms as a tool to empirically

investigate the barriers to export. Yaprak (1985) find existence of a

difference of perceptions about export barrier between exporters and

non-exporters for small exporting and non-exporting US firms. On the

other hand Ahmed, et al. (2005) find no significant differences in the

perceptions of Malaysian exporters and non-exporters towards different

barriers to export. Other studies focus on managerial perceptions of

only exporting firms regarding export barriers. For example, Axinn,

(1988) analyses how managerial perceptions influence export

performance of machine tool manufacturers in the US and Canada. The

study specifically considers the exporters’ perceptions of the benefits of

exporting rather than selling in the domestic market. It is found that

perceptions of the complexities related with exporting and managers'

work experience in foreign countries are related to the percentage of

exports relative to total sales of the firm.

Khorana, et al. (2010) focus on the perceptions of export

problems faced by Indian small and medium firms. The study evaluates

Indian exporters’ perceptions to problems they face in the EU market.

Sectors covered in the study are leather, footwear, and textile and

clothing. Export problems are put in two broad categories viz. external-

foreign and internal-foreign. External-foreign problems include

customs valuation and clearances, administrative and documentary

formalities, foreign regulations and standards etc. Internal-foreign

export problems mainly originate from firms’ organisational structure.

The results show that problems of exporting firms are largely of

external-foreign nature.

Siringoringo, et al. (2009) undertake a study to identify and

analyse the problems faced by Indonesian exporters in small and

medium enterprises. The study uses data about management perception

through a questionnaire designed to assess problems faced by SME

owner or manager. The list of problems include bureaucracy, product

3

quality, export procedures, lack of promotion and competition.

Respondents are asked to rank problems with 5 choices on Likert scale.

The findings suggest that export barriers are mainly due to lack of

human knowledge as well as government authorities and agencies. The

authors recommend equipping SME’s management with training and

information to overcome these problems.

The present study is in line with the empirical work described

above. The main objective is to evaluate exporters’ perceptions to the

problems faced in exploiting their full competitive potential in the

export markets. In addition, the study aims to suggest policies that

might be required to ensure that our exporters are able to take full

advantage of increased market access brought about by new trading

environment. We hope that recommendations that follow from the

analysis will be helpful in enhancing the export competitiveness of our

manufacturers.

The rest of the study is organised as follows. Section 2 sets out

the conceptual framework that helps identify the core issues, and spells

out the salient features of the questionnaire used in the survey. Section

3 discusses the main findings of the survey while Section 4 concludes

the discussion.

2. THE CONCEPTUAL FRAMEWORK

Export competitiveness is a complex issue. The factors that

affect export competitiveness vary over time, across sectors and

geographical locations. To keep the analysis at a manageable level, we

seek some common features which are in general helpful in improving

the business environment by reducing risks, costs and time, and thus

motivating entrepreneurs to invest more in terms of money and effort.

Major obstacles in creating a good business environment can be

categorised in the following headings:

Lack of trained labour

Financial inputs

Energy

Physical Infrastructure

Bureaucratic Hurdles

Institutional Rigidities

This is a very broad and general classification of obstacles faced

by manufacturers/exporters most of the time, and these obstacles do not

affect all sectors in a uniform manner. As pointed out in the previous

section, we adopt an indirect approach to assess how these factors

impact the performance of the businesses. We rely on the judgment of

4

the respondents regarding the intensity of the obstacle and ask the

respondents to rank the issues according to their perception about the

severity of the issue. We then use these rankings to provide a general

assessment about the sectoral incidence of these obstacles.

2.1. The Survey and Questionnaire

The study is based upon a survey jointly prepared by the Lahore

Chamber of Commerce & Industry (LCCI) and Pakistan Institute of

Development Economics (PIDE). Purposes sampling approach has

been used and the survey covers 40 firms/companies in the areas of

Textiles, Garments, Food Processing, Cement, Chemical, Hosiery/Bed

Sheets, Auto Industry, and Construction Materials. The questionnaire

has the following major components (see Appendix IV for the detailed

questionnaire):

2.1.1. Firm-Specific Characteristics

This part covers firm-specific characteristics like major activity,

location, and quantitative information on firm’s human resources. This

information can provide insights about how firm-specific

characteristics influence firm’s perception about different issues.

Moreover firms’ classification by size is possible by information about

the number of workers they employ.

2.1.2. Activities and Problems Currently Faced in Exporting

The World Bank’s World Trade Index (WTI) gives special

emphasis to procedural requirements for exporting of goods.

Preparation of such an index was not possible due to many

constraints. Instead, firms were asked to indicate their perception

about activities and problems currently faced in exporting. These

activities include pre-shipment activities, inland carriage and

handling, custom clearance custom release, and international

carriage and handling.

2.1.3. System of Certification

Many international standards have been developed to ensure

quality and a guarantee that goods are produced under healthy social

and environmental conditions. In the survey firms were asked to

provide information about their awareness of these standards. Firms

were also asked whether they are certified to these standards or if such

a system is currently being developed/planned or is being developed.

The following standards are covered in the survey:

5

ISO9000

ISO14000

HACCP

SA8000

OHSAS

EUREPGAP

Traceability

A brief description of these standards is provided in Appendix II.

2.1.4. WTO-related Agreements and Negotiations

Most of the WTO agreements came into force in early 1995.

However, there are wide differences in how different exporting

companies reacted toward these agreements. Some companies were

quick to respond and they promptly engaged themselves in active

negotiations, either directly or through some umbrella organisation, to

draw full benefits from these WTO arrangements. On the other hand

many companies lagged behind regarding these activities and

consequently met serious obstacles in meeting criteria set in these

agreements.

In the questionnaire firms are asked to state their position about

the following agreements:

The Agreement on Technical Barrier to Trade

The Agreement on Sanitary and Phyto-Sanitary Measures

The Agreement on Pre-Shipment Inspection

The Agreement on Intellectual Property Rights

A brief description of these agreements is given in Appendix III.

2.1.5. Shipping and Logistics

Shipping and Logistic include a wide range of activities such as

the performance of customs, physical infrastructure, inland transport,

and efficiency in cargo handling. Smooth functioning in these areas is

helpful in providing goods and services on time and at a lower cost.

Firms’ perception regarding these issues can point out important

bottlenecks. The survey also seeks firms’ perception on a set of

possible solution for improving the trade logistic environment.

2.1.6. Major Socio-Political Hindrances

These hindrances pertain to general imperfections which

adversely affect the working environment. The following obstacles are

identified in the survey and firms’ perceptions are sought about them:

6

Corruption

Injustice

Bribery

Political Interference

Terrorism

Lack of Infrastructure

Market Imperfections

Most of the responses about various issues and obstacles are

sought on Likert Scale varying from 1 to 6 levels, depending upon the

nature of the problem. This enables us to locate clustering of responses

at specific ranking as shown in the graphical analysis in the following

Section.

Table 2.1

Ranking of Countries by the Competitive Industrial Performance

(CIP) Index, 2000, 2005 and 2009

Rank

Country 2000 2005 2009

Pakistan 66 67 63

Singapore 1 3 1

China 31 6 5

India 51 42 42

Bangladesh 76 75 69

Iran 98 82 83

Nepal 97 91 94

Indonesia 38 40 43

Malaysia 13 20 27

Thailand 26 27 25

Source: “Industrial Development Report 2011”: UNIDO (2005, 2011).

Various measures taken to create a business friendly

environment have also had their impact. Within SAARC region

Pakistan ranks higher than India, Bangladesh Nepal and Bhutan in Ease

of Doing Business (Table 2.2).

7

Table 2.2

Ranking of the Economies on the Ease of Doing Business

Country 2007 2011

Singapore 1 1

Maldives 53 79

Pakistan 74 105

Bangladesh 88 122

Sri Lanka 89 89

Nepal 100 107

India 134 132

Bhutan 138 142

Afghanistan 162 160

Source: The World Bank, “Doing Business in South Asia 2007, 2011”.

3. KEY FINDINGS OF THE SURVEY

On the basis of number of workers, 38% of the establishments

are large scale enterprises with 300 or more workers. Twenty-four

percent of the establishments are medium with 101 to 300 workers. The

percentage of small establishments with up to 100 workers is 38

percent.

Seventy-five percent of the surveyed firms are involved in

manufacturing activity, while 20 percent are in trading. Only two

percent are multinational companies, and two percent are involved in

other activities.

By sectoral classification, textile firms have the highest

percentage (21%), followed by food industries (15%). Garment firms

are 13% and cement firms 10%. Firms engaged in activities of

Chemicals, Hosiery & bed sheet, General importers, Auto, and

Construction material, each comprise five percent, while fifteen percent

firms are engaged in other activities.

Small

(1-100)

38%

Medium

(101-300)

24%

Large

(301_hi) 38%

Manufa

cturing

75%

Trading

21%

Multinati

onal

Compan

y 2%

Other

2%

8

By the level of skills, general importers and cement firms have

the highest percentage of skilled labour, whereas chemicals and textile

firms have the least percentage of skilled labours.

Reasons for Shortage of Skilled Labour

Lack of institutional training is the most frequent reason reported

by firms for the shortage of skilled labour (35%), followed by low

quality of education (30%).

Textile

Garments

Food Processing

Cement

Chemicals

Hosiery/Bed Sheet

General Importers

Auto Industory

Construction Material

Others

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Tex

tile

Garm

ents

Food p

rocessin

g

Cem

ent

Chem

ical

Housary

/bed sh

eet

Gen

eral im

porto

r

Auto

industo

ry

Constru

ctio

n m

aterial

Oth

er

Tota

l

Profile of Establishment:

Percentage Firms by Location

Unskilled

skilled

9

Reduction in Cost if Labour Becomes Productive

If the highest achievable level of labour productivity is achieved,

it will obviously reduce costs of the firms. But firms have different

perceptions about the extent of this cost reduction. The highest

percentage (35.48%) of firms believe that costs will be reduced by 01-

10%, whereas 29.08% believe 11-20% reduction. On the other hand

12.9% firms believe that there will be no such effect on cost.

Duration of Finance

It turns out that majority of firms (60%) use short term finance.

This indicates that most firms use finance for working capital needs.

Firms using medium term and long term finance are 4% and 36%

respectively.

010

2030

40

low quality of education

lack of on job training

lack of training staff

lack of institutional training

low salary

Perception of Firms

0

5

10

15

20

25

30

35

40

No of Firms

Percen

tag

e o

f F

irm

s

01-10

11-20

21-30

31-40

No Effect

10

Importance of Location

The location of a firm has an important bearing on its capacity to

produce and export. Cheap availability of inputs, good infrastructure,

high demand of output, and availability of skilled labour are important

factors while deciding about the location of the establishment. The

Survey figures show that high demand of output (34%), and availability

of skilled labour (27%) are the most frequent reasons while deciding

the location of the establishment. Cheap Availability of Inputs (21%)

when added to availability of skilled labour indicates that inputs play

more important role in deciding firms’ location.

Fuel (Electricity and Gas) as a Percentage of Total Cost

Fuel as a percentage of total cost turns out to be the highest in

cement producing firms (35%), whereas in garments and auto firms

these percentages are 2.17 and 2.60 respectively.

Short Term

Medium Term

Long Term

0 10 20 30 40

Cheap Availability of Inputs

Good infrastructure

High demand of output

Availability of skilled labour

Other

Profile of Establishments:

Percentage Firms by Location

Percentage of Firms

11

Problems Related with Electric Supply

Frequent load-shedding and power failures seriously affect the

working of industries in our country. Some industries have tried to

meet with this problem by using their own electricity generators and

UPS. The survey shows that about 23% industries use UPS and about

38% use generators to meet these problems related with electricity.

Activities and Problems Currently Faced in Exporting

Pre-Shipment Activities

The percentage distribution of the level of satisfaction about

procedures and sub-activities shows that level of satisfaction is least

(100% not satisfied) for the procedure labelled “Prepare freight

Forwarding Instructions and Other Documents Required for the

Transfer of Cargo to Port of Departure”. The percentage of firms

showing satisfaction about “Securing Letter of Credit” is 62.5.

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

Tex

tile

Garm

ents

Food P

rocessin

g

Cem

ent

Chem

icals

Hosie

ry/B

ed S

heet

Auto

Industo

ry

Constru

ctio

n M

aterial

Oth

ers

Fuel (Electricity and Gas) as a

Percentage of Total Cost

0

5

10

15

20

25

30

35

40

45

Percentage of UPS Users Percentage of Generator Users

12

Inland Carriage and Handling

Highest percentages of firms who are satisfied about “Load

Cargo on Local Carriage” and “Arrange a Deposit for Terminal

Handling Charges” are 57.1 and 63.6 respectively. Highest percentage

of “not satisfied” firms (33.3%) occurs in case of “Deliver cargo to port

of departure”.

Customs Clearance

In customs clearance activities, percentage of “satisfied” firms is

highest for “Inspection for Technical Standard” (62.5%). Highest

percentage of “Not Satisfied” firms is 23.1% for “Physical Inspection

of Goods to Determine if It Complies with Technical or Sanitary or

Phyto-Sanitary Standards”

0.0 20.0 40.0 60.0 80.0 100.0 120.0

1. Source letter of credit(L/C)

2.packing of good

3. Prepared freight

4. prepare document for export

5 arrange international freight

6. perform preshipment insepection

7. Arranging payment for preshipment

Activities and Problems Currently Faced in

Exporting: Pre-Shipment Activities

Not Satisfied

Somewhat

Satisfied

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Load Cargo on

Local Carriage Deliver Cargo to

Port of Departure Wait for Custom

Clearance Arrange a Deposit

for Terminal

Charge

Inland Carriage and Handling

Highly Satisfied

Satisfied

Somewhat

Satisfied

13

Customs Release

Two issues are important about custom release:

Discharge cargo from terminal to export

Arrange payment for terminal handling charges

Here the level of satisfaction is quite high as only 6.7% and

7.7% of the firms are not satisfied respectively about these two issues.

This indicates that the reforms introduced in the last few years to

streamline customs procedures are paying off.

International Carriage and Handling

Here firms are asked to give their perception about the degree of

satisfaction on the following issues:

Examine document to prove that regulatory procedures are

met

Load cargo at port of departure

Transport goods to final destination

Arrange a payment for international freight charges

Highest percentage of satisfied firms is reported in case of

“Transport goods to final destination” (58.3%). Percentage of “Not

satisfied” firms is highest in case of “Load cargo at departure port”

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Request fo

rCcle

arance

Exam

inatio

n o

f Man

dato

ry D

ocu

men

ts

Physica

l Insp

ection

Insp

ectio

n w

ithT

technic

al Stan

dard

s

Customs Clearance Highly Satisfied

Satisfied

Somewhat Satisfied

Not Satisfied

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Hig

hly

Satisfied

Satisfied

Som

ewhat S

atisfie

d

Not S

atisfied

Customs Release

Discharge cargo

from terminal

Arrange a payment

for terminal

charges

14

System of Certification

The Government has increased the support for various quality,

environmental, and social certifications when a manufacturing unit gets

four of the specified standards (Strategic Trade Policy Framework

2009-12, p. 45). But low awareness of these systems among exporters

makes these measures practically ineffective. Percentage of awareness

about these systems of certification is highest among the firms in cases

of ISO 9000 and ISO 14000. Although it is not as high as it should be.

Only 40.54% of the firms are completely aware about ISO 9000 and

25% about ISO 14000. Unawareness is highest among firms about

EUREPGAP (55%).

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Examine

Document to

Prove

Load Cargo at

Departure Port Transport Goods

to Final

Destination

Arrange a

Payment for

International

Freight

International Carriage & Handling

Highly Satisfied

Satisfied

Somewhat Satisfied

Not Satisfied

0.00

10.00

20.00

30.00

40.00

50.00

60.00

Awareness about Systems of Certification

Completely Unaware

Unaware

Aware

Completely Aware

15

Certification to the Standards/Preparation for Certification

Another issue that has affected the exports involves WTO

arrangements. These are the standards and norms prescribed by the

WTO like quality certification, and adherence to health, labour, and

environment standards. These standards have posed a real challenge to

firms in developing countries like Pakistan. It might be interesting to

find some patterns in certification of firms. Survey results show that the

highest percentage of firms turns out to be certified to ISO 9000

(66.7%). EUREPGAP and Traceability are the least met standards of

certification (7.7% and 5.1% respectively)

Agreements and Negotiations

Questions about firms’ awareness regarding different trade

agreements and negotiations show that 57.58% of firms are aware

about Agreement on Technical Barriers to Trade. Awareness is the least

about Agreement on Sanitary and Phyto-sanitary.

0.0

20.0

40.0

60.0

80.0

ISO

9000

ISO

14000

HA

CC

P

SA

8000

OH

SA

S

EU

RE

PG

A

P

Trac

eability

Preparation for Certification

Company Certufied to the System

System Being Developed/Planned on Being

Developed

Completely Unaware

Unaware

Aware

Completely Aware

0.00

10.00

20.00

30.00

40.00

50.00

60.00

Completely Unaware

Unaware

Aware

Completely Aware

16

Effect of Agreements on Business

What do firms perceive about the effect of trade agreements and

negotiations on their business? To assess this, firms were asked to rank

their perception from “Don’t know” to Very positive”. The responses

show that majority of firms (57.6%) regard agreement on pre-shipment

inspection as very negative. About one third of the firms are not clear

about most of the agreements and negotiations. A very small

percentage (about 10%) has any positive perception about these

agreements.

Perception about On-going Dialogues

Firms were asked about dialogues/consultations between their

business, or sector representatives/umbrella organisation and ministries

in charge of negotiating the rule-based multilateral trading system at

the WTO level. The responses show that about 40 to 45 percent firms

perceive theses dialogues as average. In case of Arrangements on

Sanitary and Phyto-Sanitary 27.2% even do not know about such

dialogues.

0.020.0

40.060.0

Don't Know

Very Negative

Negative

Neither Negative nor Positive

Positive

Very Positive

Effect of Agreements on Business

Agreement on Intellectual property right

Agreement on Pre-shipment Inspection

Arrangements on Sanitary & phyto-

sanitary

0.010.0

20.030.0

40.050.0

Do not Know

No dialogue

Weak Dialogue

Average Dialogue

Strong Dialogue

Very Strong Dialogue

Perception about On-going Dialogues

Intellectual Property Rights

Pre-Shipment Inspection

Sanitary & phyto- sanitary

Agreement on TBT

17

Use of Transportation Mode for Shipment

Major mode of transport used is roads except for “General

Importers” whose use of railway is about 57.5%. Highest use of roads

occurs in Chemical industries (100%). Auto industry is the biggest user

of Airways (52.5%).

Perception about Efficiency of Institutions

Majority of the firms (about 54%) believes Banks and

Chamber of Commerce as efficient. Provincial Authorities and

TDAP are reported as Not Efficient by 37.5% and 28.6% of the

firms respectively.

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Railway

Air

Road

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Tax

DepartmentBank

TDAPChamber Of

Commerce Provincial

Authorities

Perception about Efficiency of Institutions

Highly Efficient

Efficient

Slightlty Efficient

Not Efficient

18

Effect of Hindrances on Firms’ Cost

Terrorism and Lack of Infrastructure are ranked as “highly

significant” by 27.3 and 25% of the firms. Corruption is ranked

“slightly significant” by 40% of the firms, whereas political

interference is ranked “not significant” by 42.4% of the firms.

Reasons for Failure of Business

Bad Planning and bad government policy are perceived as the

major factors responsible for business failure by 69.2% and 64.1% of

the firms respectively.

0.010.0

20.030.0

40.050.0

Corruption

Injustice

Bribery

Political Interference

Terrorism

Lack of Infrastructure

Market Imperfections Not Significant

Slightly Significant

Significant

Highly Significant

0

10

20

30

40

50

60

70

80

Bad

Plan

nin

g

Lack

of F

inan

ce

Po

or M

arket C

on

ditio

n

Un

fair Com

petitio

n

Bad

Luck

Lack

of A

dvice

Bad

Go

vern

men

t Policy

No

Rules an

d R

egulatio

ns

Reasons for Failure of Business

19

Quality of Trade Logistics

About 40% to 58% of the firms regard quality of trade logistic as

support for business with respect to saving cost, reducing inventory,

improving efficiency, and consumer satisfaction.

Major Constraints to Improving Trade Logistic Environment

Opinions were sought on the following constraints to improving

trade logistic environment.

Many Agencies Involved

Many Documents Required

Slow Processing of Custom Clearance

Poor in Land, Road, or Rail Infrastructure

Poor Transportation Service

“Poor in Land, Road, or Rail Infrastructure” was reported by

38.2 percent of the firms as the “Major Obstacle” to improving the

trade logistic environment.

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Saving Cost

Reducing Inventory

Improving Efficiency

Consumer Satisfaction

Quality of Trade Logistics

Not Effective

Slightly Effective

Effective

Highly Effective

0.0

10.0

20.0

30.0

40.0

50.0

Many A

gencies In

volv

ed

Many D

ocum

ents R

equired

Slo

w P

rocessin

g o

f Custo

m

Clea

rance

Poor In

Lan

d, R

oad

, or R

ail

Infrastru

cture

Poor T

ransp

orta

tion S

ervic

e

Major Constraints to Improving

Trade Logistic Environment

No Obstacle

Minor Obstacle

Moderate Obstacle

Major Obstacle

20

Perception about Policy Recommendations

The ranking of proposed solution shows that there is much

optimism about effectiveness of various policy options. Almost half of

the firms perceive these options as very important.

Reduction in Cost if Proposed Solutions are Implemented

If the above mentioned solutions are adopted then perceived

reduction in cost is given in the following chart. More than 40% firms

perceive 11-20 % reduction in cost due to these solutions.

Reduction in Cost if Proposed Solutions are Implemented

31.0

41.4

13.8

10.3

3.4

01-10

11-20

21-30

31-40

No Effect

Regional Distribution as Destination of Exports

The distribution of exports by region shows that more than 50%

of average exports go to South Asia. Whereas major destinations of

exports (with respect to the number of firms) are European Union and

East Asia with 27.1% and 25.4% of the firms respectively.

0.0

20.0

40.0

60.0

Epro

cessin

g o

f Docu

ments

Coord

inatio

n b

/w C

once

rned

Auth

oritie

s

One W

indow

Operatio

n

Elim

inate C

orru

ptio

n

Port In

frastrucu

re

Inlan

d T

ransp

ortatio

n

Easy

Mode P

ayin

g

Perception about Policy Recommendations

No Effect

Minor importance

Moderately important

Very Important

21

Regional distribution as Destination of Exports

Percentage of Firms

Percentage of Exports0.0

10.0

20.0

30.0

40.0

50.0

60.0

European

UnionEast Asia

North

AmericaSouth

AsiaMiddle

EastOthers

4. SUMMARY AND CONCLUSIONS

This study has attempted to analyse firms’ perceptions about

various obstacles which hinder export performance. Using the survey

data the study finds that on various issues firms’ responses cluster

around specific responses. This indicates the importance of those

specific issues and underlines immediate attention from government as

well industrial groups to address those issues. The shortage of skilled

labour turns out to be more severe in Textiles, Chemicals and Hosiery/

Bed Sheet sectors. Firms regard lack of institutional training, and low

quality of education as the most important reasons for the lack of

labour skills. A majority of the firms believe that if skilled labour

becomes available they will be able to reduce their cost and thus

enhance their competitiveness. In terms of the location decision of

exporting firms, the availability of various inputs plays a more decisive

role than output market.

Majority of firms do not avail long-term credit. Whether this is

due to demand side or supply side problems, is an issue which requires

further research. This also indicates that firms primarily seek financing

for their working capital needs and if this is streamlined there is

potential to lower the firms’ transactions costs. Also cost of fuel puts a

heavy burden on firms and adversely affects their competitiveness.

Availability of cheap fuel especially electricity is essential to boost

exports.

Quality certification and adherence to health, labour, and

environment standards is still a problem for exporters. There is urgent

need to increase awareness about these standards, and to simplify

procedures to avail facilities provided in this regard. While Pakistan has

22

set up the necessary institutional arrangements for certification issues,

the implementation remains limited mainly because exporters are not

aware about the standards. Raising their level of awareness can result in

significant gains in certification and quality improvements.

A number of institutional rigidities, market imperfection,

weaknesses in physical infrastructure, and lack of general business

environment are features commonly perceived by firms as hurdles in

export competitiveness. It is therefore essential that such constraints are

removed so that a conducive business environment is created for

exporters of manufactured goods. It goes without saying that energy

shortages are a binding constraint on manufacturing exports and that

there is an urgent need to resolve the energy issues.

Appendices

APPENDIX-I

EXPORT PERFORMANCE AT THE MACRO LEVEL

MODEL AND DATA

In this section we develop an econometric model to analyse the

effects of various factors on exports performance. Export performance

at the macro level is affected both by the international and domestic

variables. To investigate the effects of international variables we

employ FDI and real exchange rate whereas GDP growth rate, indirect

taxes, communication facilities, savings, industrialisation, labour force

and official development assistance is incorporated to measure the

effects of domestic variables on exports performance. The specified

export performance function is as follow.

,,,,,( tttttt TAXESODASAVINGGDPGROWTHFDIfEXPORTS

),,,, ttttt TELEPHROADSLFMVADREER … … … (1)

The functional form in Equation (1) provides information about the

important factors that affect the exports performance. To analyse their

real quantified effects of factors, we present model in logarithmic form

in equation given below:

),log(8),log(7),log(6

),log(5),log(4),log(3

),log(2),log(1log( )

ttt

ttt

ttt

LFaMVADaREERa

TAXESaODAaSAVINGa

GDPGROWTHaFDIaEXPORTS

).log(10),log(9 tt TELEPHaROADSa … … (2)

where the t represent period of time. The EXPORTSt corresponds to

exports as a percentage of GDP.

23

The independent variables appearing on the right hand side of

the Equation 1 belong to the following broad categories:

International Factors

This category includes FDI and REER. FDIt is foreign direct

investment as a percentage of GDP, whereas REERt is real exchange

rate which measured as multiplying the nominal exchange rate by US

CPI and divided by domestic CPI.

Public Policy Factors

In this category we include ODAt which is official development

assistance as a percentage of GDP, and TAXESt which show indirect

taxes as a percentage of GDP.

Infrastructural Factors

ROADSt and TELEPHt are two important variables capturing the

effect of infrastructure on export performance. ROADSt is the

percentage of paved roads as percentage of total roads, and TELEPHt

represents the number of telephones per 1000 persons.

Human Resource Factors

Pakistan being a labour abundant country relies much on labour

intensive technologies. Our labour force constitutes the biggest factor

of production in producing goods and services export as well as

domestic consumption. We have taken LFt labour force as a percentage

of total population of age 15+.

Other Structural Factors

In this category we have included GDPGROWTHt as annual

percentage growth rate of GDP, SAVINGt as national savings as a

percentage of GDP, and MVADt as industry value added as a

percentage of GDP,.

Data on all variables are taken from World Development

Indicators 2011, and cover the period 1980 to 2010.

Growth of the GDP is an indicator of future potential and

sustainability of production level [see Bertil (1968)]. The higher level

of production causes the export expansion, because surplus of output

can be exhausted in international markets. So we expect positive impact

of GDP growth on exports expansion.

24

Economic literature has discussed the role of FDI in exports

development. Pfaffermayr (1996) FDI found a positive

relationship between FDI and export growth and explained that the

main reason of exports expansion is multinational corporations

oriented exports. Hoekman and Djankov (1997) suggested that

FDI have positive or weak effects on the exports performance in a

country. These studies also pointed out that the role of FDI in

developing country is controversial and depends on motive for

investment, if the objective behind FDI is to capture domestic

market (tariff-jumping type investment), it may not contribute to

export growth. Higher savings may result in higher volume of

goods made available for exports. So we expect positive impact of

this variable on exports.

The official development assistance is to facilitate growth and

increase infrastructure, which in turn will favourably affect investment

climate. We expect positive effect of this variable on export growth.

The conventional relationship between exchange rate and exports

performance is discussed in theory. The depreciation in exchange rate

makes exports cheaper in international markets resulting in increased

demand for exports, therefore we expect the positive impact of real

exchange rate on export growth.

In current time period the use of communication facilities

has become inevitable. Kumar (1998) justified that the use of

communication facilities has favourable effects for exploration

and access to the new markets in world. We employ the number of

telephones sets in use to measure the effects of communication

facilities and expect a positive impact of provision of such

facilities.

The impact of indirect taxes could be negative on production

which may in turn adversely affect the export performance. The labour

force is considered as one of the key factors that determine the

production level of firms. Pfaffermayr (1996) shows that the

availability of labour force positively impacts the exports level as

skilled labour force enhances competitiveness through better

productivity. Finally, the industrialisation process can provide the basis

for sustainable growth in an economy. In this context, the value added

of manufacturing sector is used to account for the industrialisation

process in the export regressions.

Results

We estimate the Equation (2) with OLS technique. The

estimated results are reported in tables below.

25

Appendix Table 1

OLS Estimates of Model

Variable Coefficient t-Statistic

C 22.58 4.11

LOG(GDPGROWTH) 0.04 1.22

LOG(FDI) –0.03 –0.62

LOG(LF) –3.25 –2.54

LOG(MVAD) 0.55 1.51

LOG(ODA) 0.10 2.10

LOG(REER) –0.23 –1.24

LOG(SAVING) 0.28 3.53

LOG(TAXES) –2.29 –1.44

LOG(ROADS) –0.15 –0.52

LOG(TELEPH) 0.28 2.82

R-squared 0.87

Adjusted R-squared 0.81

Durbin-Watson stat 1.86

Although the controversial view exists on relationship between

FDI and exports in empirical literature, however, our study finds

negative impact of FDI on the export growth in Pakistan. The role of

FDI in exports promotion in developing countries remains controversial

and depends crucially on the motive for such investment; if the motive

behind FDI is to capture domestic market it may not contribute to

export growth. The low foreign direct investment, lower level of

infrastructure and the rigidity in both the factor as well as commodity

markets reduce the role of FDI in exports expansions in Pakistan.

According to results, the GDP growth has a positive but

insignificant impact on export growth. This may imply that GDP

growth is based on products that are primarily sold in the domestic

markets. The results also reveal that real exchange rate negatively

affects exports in Pakistan. It is theoretically consistent as depreciation

in exchange rate makes exports less expensive and increase export

growth.

For the measurement of communication facilities we employed

the number of Telephones. The effects of expansions in number of

Telephones are positive and significant. Thus expanding the network of

such facilities is helpful in exploration of new international markets.

Further, these make easy to access the world markets.

The effect of labour force on exports growth is negative and

significant. The increase in unskilled labour causes negative effects on

production level that in turn reduce the exports growth in Pakistan. The

26

effect of official development assistance variable is also positive and

significant. It shows that the positive behaviour of government

regarding the export facilitations develops the positive expectations of

exporters that play a positive role in exports performance.

Indirect taxes are negatively associated with exports. The

proportion of indirect taxes varies for different goods. So it seems that

indirect tax is high for exportable goods that adversely affect exports

performance in Pakistan.

The findings also provide evidence that increase in savings

significantly contributes to exports. Higher savings imply lower interest

rates that in turn promote investment opportunities. The manufacturing

value added also positively explains export growth in Pakistan but the

impact is statistically insignificant. This may be due to the fact that

major exports are agriculture based and that Pakistan’s manufacturing’s

exports are inelastic in world market.

APPENDIX-II

A BRIEF DESCRIPTION OF COMMONLY USED

STANDARDS THE INTERNATIONAL ORGANISATION

FOR STANDARDISATION (ISO)

It is an international standard-setting body established in 1947. It

has 158 member countries in the world. It is a non-governmental with

headquarters in Geneva, Switzerland. ISO promulgates worldwide

industrial and commercial standards. The ISO 9000 and ISO 14000 are

among ISO's most well-known standards. The ISO 9000 family

addresses quality management, whereas the ISO 14000 family

addresses Environmental management.

EurepGAP

EurepGAP was created in the late 1990s by several European

supermarket chains and their major suppliers as a common standard for

farm management practice. GAP is an acronym for Good Agricultural

Practices. It was to bring conformity to different retailers' supplier

standards. It has now become the world's most widely implemented

farm certification standard. Most European customers now require

EurepGAP certification as a prerequisite for doing business in

agricultural products.

Hazard Analysis and Critical Control Point (HACCP)

HACCP was conceived in the 1960s when the US National

Aeronautics and Space Administration (NASA) felt the need to design

27

and manufacture foods for space flights. Later it became a systematic

preventive approach to food safety and pharmaceutical safety. HACCP

is now being used in the food industry to identify potential food safety

hazards. HACCP principles are now included in the ISO 22000.

Social Accountability Standard (SA8000)

It is a standard for decent working conditions. It has been

developed and overseen by Social Accountability International (SAI). It

covers the issues like child labour, forced labour, freedom of

association, discrimination, and health and safety of workers etc.

Occupational Health and Safety Standards (OHSAS)

OHSAS was formed in January 2000. It was developed for

organisations to meet their health and safety obligations in an efficient

manner. It is the most widely recognised standard on Occupational

Health and Safety management. The system enables organisations to

identify problems and take appropriate measures to reduce occupational

hazards.

Traceability

Traceability refers to the completeness of the information about

every step in a process through all stages of production, processing and

distribution. Traceability enables to verify the history, location, or

application of an item by means of documented information. There is a

host of benefits associated with traceability. For example, in the case of

automobiles it makes recalls possible; in the food items it helps to

ensure food safety; in manufacturing industries it contributes to identify

counterfeit goods. EPC global Software Certification Program provides

information regarding certified products and the vendors who develop

them; TRACES (Trade Control and Expert System) assists in the

management of the import and export of live animals and animal

products to and from the European Union.

APPENDIX-III

A BRIEF DESCRIPTION OF SOME WTO AGREEMENTS

AGREEMENT ON TECHNICAL BARRIERS

TO TRADE (TBT)

This Agreement tries to ensure that regulations, standards,

testing and certification procedures do not create unnecessary obstacles.

However, the agreement provides member countries with the right to

take measures which may be regarded necessary for protection of

28

human health and safety, or the environment. This agreement came into

force with the establishment of the WTO at the beginning of 1995.

Agreement on Sanitary and Phyto-Sanitary Measures

This agreement was negotiated during the Uruguay Round of the

General Agreement on Tariffs and Trade. The agreement commits

member countries to enforce certain measure to protect public health.

These measures are based upon internationally established guidelines

and risk assessment procedures. Like Agreement on Technical Barriers

to Trade, this agreement also came into force with the establishment of

the WTO at the beginning of 1995.

Agreement on Pre-Shipment Inspection

Pre-shipment inspections are customarily carried out at the place

of origin. Their objective is to ensure that the type, quality, price and

customs valuation of goods are as claimed. These inspections are

usually performed by authorised private organisations. The agreement

on Pre-Shipment Inspection ensures that the pre-shipment inspection

process does not create unnecessary delays or discriminatory treatment.

The agreement came into force on January 1, 1995.

Agreement on Intellectual Property Rights

The WTO’s Agreement on Trade-Related Aspects of Intellectual

Property Rights (TRIPS)attempts to bring these rights under common

international rules. Like other WTO agreements the Agreement on

Intellectual Property Rights took effect on 1 January 1995. However

the time frame for full implementation varied across countries.

Developed countries were given one year to implement the agreement.

Developing countries were initially given 11 years, but later this date

was extended up to 2013.

APPENDIX-IV

QUESTIONNAIRE

This questionnaire is divided into six sections. The first section

asks about the characteristics of the sample firms. Technical

efficiencies and cost information issues are included in the second and

third section of the survey. The fourth section assesses information

about trade logistics matters. Further, the queries about the hindrance to

market access are included in section five. Last section asks the

suggestion of firms for policy recommendations.

29

Firm/Company’s Characteristics

Q1. What is the nature of business of the firm/company?

□ Manufacturing □ Trading

□ Multinational Company □ Other; please specify: …………………

Q2. What is the location of the firm/company? Why this location is

important fromor the business point of view?

Location …………………………………

□ Cheap availability of inputs □ High demand for output

□ Good infrastructure □ Others

□ Availability of skilled labour

Q3. Please indicate the number of people currently employed (full

time and part time) by your firm.

Regular Employees Part time Employees

Q4. What is the current percentage (%) of domestic demand and

export share of the firm’s product in total output or production?

Domestic demand % Exports as % of total

output

Firm/Company’s Technical Efficiency

Q5. What is the current share of skilled (professionals) and unskilled

workers in total number of employees?

Q6. Provide details on the leading sources of machinery imports and

what type of machinery/ technology your firm/ Company

imported.

Source 1: Region ……… Type of Technology……………..

Source 2: Region ……… Type of Technology……………..

Source 3: Region ……… Type of Technology……………..

Cost Information

Q7. Provide information about the capital structure used. Also

mention percentage of each mode.

30

□ Self-Financed …………% value

□ Debt Financed …………% value

□ Equity Financed …………% value

Q8. What is the percentage (%) of total cost for Fuel, Gas, Water and

Electricity?

□ Cost of Fuel as % age of total cost …………….

□ Cost of Electricity as % age of total cost …………….

□ Cost of Gas as % age of total cost …………….

□ Cost of Water as % age of total cost …………….

Activities and Problems in Exporting

Q9. Please fill in the following table

Procedures and Sub-activities

Time/Days

Consumed

Costs

(please specify

currency unit)

Name of

Agency

Involved

Degree of

Satisfaction

(Rate from

1 to 4) as

given in key

Pre-shipment activities Avg. Max.

1. Conclude Sales contract

2. Secure letter of credit (L/C)

3. Packing of goods

4. Prepare freight forwarding instruction

and other documents required for the

transfer of cargo to port of departure

5. Prepare documents for export

6. Arrange international freight

7. Perform pre-shipment inspection,

8. Arrange payment for pre-shipment

inspection

Inland carriage and handling

1. Load cargo on local carriage

2. Deliver cargo to port of departure

3. Wait for customs clearance

4. Arrange a deposit for terminal handling

charges

Customs clearance

1. Request for clearance

2. Examination of mandatory documents

3. Physical inspection of goods

4. Physical inspection of goods to

determine if it complies with technical

or Sanitary or Phyto-Sanitary standards

5. Arrange payment for export taxes,

tariff, and duties

6. Arrange payment for technical control

charges

Customs release

1. Discharge cargo from terminal to export

2. Arrange a payment for terminal

handling charges

International carriage and handling

1. Examine documents to prove that

regulatory procedures are met

2. Load cargo at port of departure

3. Transport goods to final destination

4. Arrange a payment for international

freight charges

31

Key for Rating:

1 = Highly Satisfied 2= Satisfied,

3 = Somewhat Satisfied 4 = Not Satisfied

System of Certification

Q10. What is your awareness of the following standard? (Please

circle)

Fully

Unaware Unaware

Averagely

Aware Aware

Fully

Aware

ISO9000

ISO14000

HACCP

SA8000

OHSAS

EUREPGAP

Traceability

Q11. Please indicates if your company is already certified to the

following standards or if the system is currently being

developed/ planning on being developed. (Please tick).

Company Certified to

System

System being developed/

planning on being

developed

ISO9000

ISO14000

HACCP

SA8000

OHSAS

EUREPGAP

Traceability

Agreement and Negotiations

(a) Are you aware of the following WTO agreements? (Please tick) Fully

Unaware Unaware

Averagely

Aware Aware

Fully

Aware

Agreement on

Technical Barrier to

Trade (TBT)

Agreement on Sanitary

and Phyto-Sanitary

Agreement on Pre-

shipment inspection

(PSI)

Agreement on

intellectual property

rights

32

(b) How these agreements affect your business?

Don’t

Know

Very

Negative Negative

Neither

negative

nor

Positive

Positive Very

Positive

Agreement on

Technical Barrier to

Trade (TBT)

Agreement on

Sanitary and Phyto-

Sanitary

Agreement on pre-

shipment inspection

(PSI)

Agreement on

intellectual property

rights

(c) How much dialogue /consultation is there between your

enterprise, or your sector representatives/umbrella organisation

and the ministries in charge of negotiating the rule-based

multilateral trading system at the WTO level? Please tick

Don’t

Know

No

Dialogue

Weak

Dialogue

Average

Dialogue

Strong

Dialogue

Very

Strong

Dialogue

Agreement on

Technical

Barrier to Trade

(TBT)

Agreement on

Sanitary and

Phyto-Sanitary

Agreement on

pre-shipment

inspection (PSI)

Agreement on

intellectual

property rights

Shipping and Logistics

Inland Transport

Q13. What type of transportation mode your company is using for

inland transportation, also mentions time for shipment?

1. □ Railways

2. □ Airways

3. □ Roads

33

Option Selects Time

Own transportation services [ ] [ ] days

Public transportation [ ] [ ] days

Private transportation [ ] [ ] days

What is the ton/km cost? Rs. _________

What is the total cost in Pak rupee? Rs. _________

Is this mode of transportation easily available? □ Yes □ No

Is it reliable? □ Yes □ No

What is the total cost of loading and unloading? Rs. _________

Loading and Unloading

Loading facilities are provided by you or not? □ Yes □ No

Unloading facilities are provided by you or not? □ Yes □ No

Total Transportation Cost

Below give the information regarding cost on different processes of

inland transportation and time required in completion of these

processes

Cost (Rs) Total time (Days)

Documentation Rs. _________ [ ] Days

Traveling Rs. _________ [ ] Days

Loading Rs. _________ [ ] Days

Unloading Rs. _________ [ ] Days

Clearance Rs. _________ [ ] Days

Total cost and time required for the completion of whole process

Rs. _________ [ ] Days

Labour

Q14. Is labour with required skills available? □Yes □ No

In case of shortage of skilled labour, specify the reasons

□ Low quality education □ Lack of training staff

□ Lack of training institutions □ Low Salary

if any other, then please specify: ___________________________

Q15. If the optimum level of labour productivity is achieved, then

how much it will reduce firm’s cost?

□ 01---10 % □ 11---20 % □ 21---30 %

□31---40 % □ No Effect

34

Q16. What type of back up is used to maintain consistent electric

supply and total cost to maintain such equipment?

(Maintenance cost covers those cost which required without use of

these equipment.) Only mention in corresponding type which firm use.

Type of Backup Cost of

Maintenance

Cost of Usage (Rs )

per Month

UPS

Fuel Generator

If other mention

Q17. If there is no back up for energy, then for how many hours, your

workers do not work due to load shedding in a day?

_________Hours in a Day

Q18. Role of Institutions

Rank the efficiency of the following institutions

1 2 3 4

Tax Department □ □ □ □

Banks □ □ □ □

TDAP □ □ □ □

Chamber of Commerce □ □ □ □

Provincial Authorities □ □ □ □

Note: (1= highly efficient, 2= efficient, 3= slightly efficient,

4 = not efficient)

If the efficiency of institutions is improved, then how much it will

reduce firm’s cost

□ 01---10 % □ 11---20 % □21---30 %

□ 31---40 % □ No Effect

Q19. Major Hindrances

Rank the effects of following factors on your firm/company’s

cost.

1 2 3 4

Corruption □ □ □ □

Injustice □ □ □ □

Bribery □ □ □ □

Political Interference □ □ □ □

Terrorism □ □ □ □

Lack of infrastructure □ □ □ □

Market Imperfections □ □ □ □

35

Note: (1= highly significant, 2= significant, 3= slightly significant,

4=not significant)

Q20. Business Failure

What factors responsible for failure of a business?

□ Bad Planning □ Lack of Finance

□Poor Market Condition □ Unfair Competition

□Bad Luck □ Lack of Advice

□Bad Government Policy □ No Rules and Regulations

Q21. Trade Logistics

To what extent Logistics affects your business regarding

following factor?

1 2 3 4

Saving Cost □ □ □ □

Reducing Inventory □ □ □ □

Improving Efficiency □ □ □ □

Consumer Satisfaction □ □ □ □

Note: (1= highly effective, 2= effective, 3= slightly effective,

4 = not effective)

What are the major constraints to the trade logistics environment?

1 2 3 4

Too many agencies are involved □ □ □ □

Too many Documents required □ □ □ □

Slow Processing of Custom Clearance □ □ □ □

Poor inland road or rail infrastructure □ □ □ □

Poor Transportation Service □ □ □ □

Note: (1= No obstacle, 2= Minor obstacle, 3= Moderate obstacle,

4 = Major obstacle)

Q22. Cost of Borrowing

Provide information about the capital structure used. Also

mention percentage of each mode.

Self-Financed Firm ____________ % value

Debt Financed Firm ____________ % value

Equity Financed Firm ____________ % value

Duration of Finance

□Short Term □Medium Term □Long Term

36

Interest rate varies with time period □Yes □No

If yes what is the interest rate for different time period mention in %

Short Term [ ] % Medium Term [ ] %

Long Term [ ] %

Interest rate paid annually or monthly □annually □monthly

Policy Recommendations

Rank the solution which you think will be most effective for

improving Logistics environment

1 2 3 4

Electronics processing of documents □ □ □ □

Coordination between concerned authorities □ □ □ □

One window operation □ □ □ □

Port infrastructure □ □ □ □

Eliminate corruption □ □ □ □

Inland transportation □ □ □ □

Easy mode of paying customs and port fees □ □ □ □

Note: (1 = No effect, 2= minor importance, 3= moderately important,

4= Very important)

If these solution are implemented then how much it will reduce

firm’s cost

□01---10 % □11---20 % □21---30 %

□31---40 % □No Effect

To what extent the role of ministry of trade, export promotion

bureau and other trade institutions is helpful?

□not helpful □helpful □very helpful

If not helpful, then suggest please, how the role of these

institutions can be improved?

Q23. Future Endeavours

Please share with us, what are your future plans for development of

your business and also to increase exports of your company.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

37

In this regard, what help do you expect or ask for, from the

Government side?

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

Please give your valuable suggestions to increase the volume of

Pakistani Exports to the world:

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

Notes:

1. This questionnaire is part of a survey and joint study, conducted by

Lahore Chamber of Commerce & Industry and Pakistan Institute

of Development Economics (PIDE), to identify barriers to exports

faced by export-oriented firms.

2. All the information and inputs provided in this questionnaire will

be strictly considered and treated as confidential and will not be

shared with others.

3. All questions asking for your comments and feedback are open-

ended. Additional sheets of paper can be used to elaborate your

point of view or answer.

4. Any other.

REFERENCES

Aaby, Nils-Erik and Stanley F. Slater (1989) Management Influences

on Export Performance: A Review of the Empirical Literature

1978–1988. International Marketing Review 6:4, 7–26.

Ahmed, U. Zafar, et al. (2005) Malaysian Exporters and Non-Exporters

Perceptions of the Various Barriers to Export, Paper presented in

10th Annual Conference of Asia-Pacific Decision Sciences Institute.

Downloaded from: http://iceb.nccu.edu.tw/proceedings/APDSI/2005/

AuthorIndex/author1.html on 02-05-2012

Akbar, Muhammad and Zareen F. Naqvi (2001) External Market

Conditions, Competitiveness, Diversification, and Pakistan’s Export

Performance. The Pakistan Development Review 40:4, 871–884.

Asian Development Bank (2004) Industrial Competitiveness: The

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