New markets, new products: Lessons learnt from Expo 2010

ARTICLE (March 11 2010): Expo 2010 was successfully held at Karachi on February 26-28. Why do we claim success! Well, facts speak loud and clear. 300 Foreign buyers from 36 countries; over 500 Pakistani products show-cased; 350 exhibit stalls, and over a hundred thousand visitors local visitors. Very popular fashion shows, and confirmed export orders of $90 million, were the icing on the cake.

Held in the backdrop of a negative international image of Pakistan, as far as law and order is concerned, these facts are even more commendable for the Expo. With such positive facts under the belt, it is time now to ponder upon the lessons emerging from the experience, both for the business as well as the policy makers.

Recent trends emerging from trade data were already pointing in a new direction of trade. The traditional view - that US and EU were the markets to be targeted by Pakistani exporters- needs to be reviewed. Closely looking at the recent direction of trade data, it transpires that Asia is beginning to forge ahead as the No 1 market for Pakistani exports, as the US-EU markets fall behind as export destinations for our products. Region-wise Exports during 2002-2009 (values in US$ million)

================================================================================= Regions Years 2004-05 2005-06 2006-07 2007-08 2008-09 ================================================================================= Total export 14,392 16,451 16,978 19,052 17,688 North America value 3,702 4,461 4,451 3,989 3,588 share 25.72 27.12 26.22 20.94 20.28 value 204 263 356 42 1 354 Central and South share 1.42 1.60 2.10 2.21 2.00 value 802 951 942 1,134 1,197 African share 5.57 5.78 5.55 5.95 6.77 value 2,188 2,490 2,675 3,862 3,492 Asian (Middle East) share 15.20 15.14 15.76 20.27 19.74 value 3117 3669 3582 4059 4273 Asia (other than ME) share 21.66 22.30 21.10 21.30 24.16 value 3,965 4,108 4,443 4,955 4,235 EU countries share 27.55 24.97 26.17 26.01 23.94 value 256 345 371 455 389 Other Europe share 1.78 2.10 2.19 2.39 2.20 value 157 165 159 178 161 Oceania share 1.09 1.00 0.94 0.93 0.91 =================================================================================

Another new fact emerging is that besides the phenomenal growth rates achieved by China and India.

African countries are showing robust GDP growth rates, which are better than the Developed Countries' economies:

Annual GDP growth rate

=============================================================== Country 2003 2004 2005 2006 2007 2008 =============================================================== China 9.3 10.1 10.4 11.6 13.0 9.6 India 7.5 7.9 9.2 9.8 9.4 7.3 Africa 4.1 5.3 4.6 5.9 N.A N.A EU 1.4 2.7 2.2 3.4 3.1 1.0 US 3.0 3.6 3.1 2.7 2.1 0.4 Japan 1.4 2.7 1.9 2.0 2.3 -1.2 ===============================================================
Source: IMF (world economic outlook)

Expo 2010 was reflective of this changing direction of trade trend, as there was a huge South American contingent of buyers from Brazil, and Argentina, and other Latin American countries. There were a number of visitors from the African continent, namely - South Africa, Kenya, Morocco., Nigeria, and Egypt. Yemen, a country with which Pakistan has had hardly a significant trade, was represented here at the Expo, with confirmed orders of $20 million, for different product sectors.

Besides, their request for hiring 10,000 English-speaking teachers, and 300 college/university professors, was already under consideration with the Government of Pakistan. Quality buyers' delegation also visited from South Korea, Malaysia, and Japan, who also struck a number of import deals in a variety of product sectors. Newer, unexplored markets should thus now be on the radar of Pakistani exporters.

Like New Markets, new products have also emerged, as is evident from the variety of product stalls. Engineering products, of the unconventional kind - auto rickshaws, CNG auto loaders were big crowd pullers at the Expo. Pakistan's exports has traditionally comprised largely of Textiles & Clothing, accounting for nearly 70% of our exports. Emergence of new and value-added products could alter that predominance of T&C in our export basket.

Highlighted through excellence awards. goods like electrical energy meters, P.E.T. resin, handicrafts, and services like, national identity cards and passports producing service, are indicative of this changing product profile of the country.

In a very few words, thus, the lessons learnt from the Expo 2010 could best be summarised thus: New Markets, New Products. If this description is taken up as a slogan for the Pak exporters as well as the TPOs, and others policy making organs, the future road map is very clear.

The exporters should look closely at the huge untapped market potential of the non-US-EU markets of the world. Not only are these faster growing economies with large populations, there is less stiffer competition, and fewer NTBs like the various certifications which are virtually becoming mandatory if one aspires to enter Developed Countries' markets.

For the policymakers, this calls for greater attention to the henceforth ignored markets of Africa, Asia, and Latin America. With this changed market focus, we need to do more market research, do more trade exhibitions, send more trade delegations, post more Trade Officers into these newer, emerging markets, which could give a shot in the arm to our somewhat stagnating exports, which have largely been to the traditional markets.

Similarly, the changing product profile needs to be understood and embraced enthusiastically, with state support for such products, through funding of required technology, accredited certification labs, and training of manpower. Our Trade Officers should be well informed of a wide spectrum of products offered by Pakistan, besides the tradition T&C, and other commodities like Rice, Leather, and Carpets. The Expo next year would have quite a different Buyers' profile and Product profile, if lessons learnt from Expo 2010 are not forgotten.

Source: http://www.brecorder.com/index.php?id=1029417&currPageNo=1&query=&search=&term=&supDate=