Addressing the 6th Export Excellence Award ceremony of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) on Saturday, he advised the garment exporters to be more imaginative while planning for the quota free era and do not look for subsidies.
He said that achievements made at the macro-economic level, which has drastically cut the cost of business, would help exporters to compete in the quota free regime.
In this connection, he cited the stable exchange rate, low inflation and low rates of interests.
Defending the Duty and Tax Remission Rules for Export (DTRE), which was opposed in his welcome address by Tahir Aziz, chairman, Prgmea, the minister said that the scheme had been introduced to save exports from the problems of delay in payment of sales tax refund and rebate.
The scheme, which has more than 1100 registered exporters, would help exporters to compete genuinely in the quota free era because in the past their competitive had largely relied on refunds and rebates.
The scheme is in vogue in many countries and would help exporters to stand on their own feet in the global era.
He enumerated a number of steps taken by the CBR to solve exporters' problems regarding delay in payment of refund. The collectorates had been asked to depute a special officer to deal with refund problems with various associations.
The National Bank of Pakistan has been asked to link its branches with the Sales Tax House to expedite verification of refund claims.
Shaukat Aziz saw tremendous chances of growth for textile sector in the quota free era, which would largely depend on improved production and better quality.
He pinned great hopes on the development of textile clothing sector, which has the element of designing and is labour-intensive providing jobs to the skilled workers.
The ceremony was also addressed by Masood Naqi and Razzak H. Paracha.
The minister later distributed export trophies to top ten exporters of the country and 18 other exporters for extra value-addition in their products.
The function was also attended by senior government officials, diplomats and Mahmood Bhatti, the Pakistani designer awarded by President Musharraf on Pakistan day.
APP ADDS: Finance Minister Shaukat Aziz has assured the business community that the next annual budget will be based on maximum facilitation to trade and investors for bringing more investment in the country and increase exports specially value-addition.
He said the country's exports remained stagnated at around $8 billion during most part of the 1990s. Over the last four years it has moved from $8 billion to $11 billion and this year it is likely to cross $12 billion.
During last two years, exporters have performed extraordinarily as the exports grew by more than 22 percent in the last fiscal while for this year the growth rate is 14 percent so far, he said.
The minister said Pakistan's export performance is a mirror image of the trade regime that has been prevalent in the country. Export performance also depends on the type of trade and exchange rate policies the government has pursued over the years.
Pakistan's trade regime is highly liberal, exchange rate has been market-determined and the trade policies were export-oriented.
These policies along with the country's overall macro-economic policies have played a major role in taking the country's exports to a much higher place, he observed.
Notwithstanding these developments, our exports are still highly concentrated in a few items and go to a few countries, he noted, adding: "This has been a major source of instability in the past and unless we diversify our exports in terms of commodities and countries, we may not be achieving our potential."
He said today textile exports contributed roughly two-third to our over all exports earnings. Together with rice and leather, they account for three-fourth of total export earning. A poor cotton crop can severely affect our total export earnings, he said, pointing out the need for diversification.
Similarly, nearly three-fifth of our exports go to European Union and North America, altogether seven countries, he said.
The minister said the government and the exporting community would have to work in tandem to diversity exports both in terms of commodity and regions.
Export Promotion Bureau (EPB) and our foreign missions would have to play a major role in achieving the objectives of diversification, the Minister observed.
He said it is reassuring for all of us that despite concentration of exports in a few items, Pakistan has changed its complexion from being a primary commodity exporting country to a manufacturing goods exporting country.
The share of primary commodity exports has declined from 44 percent to 12 percent and that the share of manufactured goods exports rose from 45 percent to 77 percent over the last two decades.
Shaukat Aziz underlined the need for a move upward to value-chain and to skill and knowledge-based items of exports.
He pointed out that in 1965 Pakistan's manufactured exports exceeded the combined manufacturing exports of Indonesia, Philippines, Thailand, Turkey and Malaysia. Pakistan's manufactured exports exceeded those of Brazil and Korea in 1965. While in the 1990's the manufactured exports of all these countries exceeded those of Pakistan by a wide margin.
Citing the reasons behind the stagnation in Pakistani exports, he said macro-economic instability, weaknesses in our trade regime and not moving upward to the value-chain were main factors.
Pakistan ranks 9th among top exporters of textile and 20th among top exporters of apparel and clothing, he said, adding: "We need to reach in the top 5 in the world."
Over the last four years Pakistan's textiles sector has invested dollars 3 to 4 billion in modernising and expanding their plants. They have prepared themselves to face the challenges of the post-quota regime beginning from next year, he said.