Spray and pray is not an export strategy

Somewhere in Sialkot, a surgical instruments manufacturer is holding a purchase order from a distributor in Frankfurt.

Someone in Washington, DC, is still trying to figure out how to import mangoes from Pakistan without going through the hassle of asking relatives or going through an informal distribution chain, while some kid in Oslo wants to buy a Trionda (the official football of the FIFA World Cup 2026), but just doesn’t know where to get it officially.

The demand in these cases is real, the margins work, and the buyers are willing to pay a premium. The supplier is willing to ship directly, but it doesn’t know how to do the same, and because of this information asymmetry, its bank declines because it isn’t aware of who the buyer is, the working capital cycle does not fit any product on the shelf, and a multitude of other reasons.

Summer transitions to Fall, the orders detailed above lapse. Nothing in the national accounts records this event, yet it is precisely where Pakistan’s export stagnation lives.

Firms are 80pc more likely to qualify for support on traditional products than on new ones

Firms are 80pc more likely to qualify for support on traditional products than on new ones

The instinctive policy response to weak exports has always been to throw more money at the problem, but as the Notorious B.I.G once wrote, the more money we come across, the more problems we see. Another refinance line, another subsidy window, or another mark-up support scheme is the reflex response — there is no shortage of loanable funds, but there is a dearth of loanable funds for small and medium enterprises (SMEs), which is compounded by a shortage of structures that convert commercially viable transactions into bankable ones.

It is estimated that the Export Finance Scheme reaches roughly five per cent of exporters, whereas long-term financing under the Long- Term Financing Facility (LT FF) reaches fewer than 1pc, in terms of number of exporters. The top 100 exporters, who account for about 40pc of export value, absorb twothirds of all export finance, and 86pc of LT FF flows into textiles and allied segments.

As per Gonzalo (2024) in “Evaluating the impact of export finance support on firm-level export performance: evidence from Pakistan”, the evaluated impact is real but narrow, as participants grow export volume by seven to 11 percentage points, with no statistically significant effect on the number of products exported or markets served.

Firms are 80pc........

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