Export reforms make way, apparently we need automation first.

Byline: Syeda Masooma

In December 2018, erstwhile finance minister Asad Umar, while chairing the first meeting of the steering committee, approved the implementation of the National Single Window (NSW) system in Pakistan by the Federal Board of Revenue (FBR) Customs' Wing. On May 28 2019, FBR Chairman Shabbar Zaidi revealed to a group of journalists and development partners that the NSW will become operational by 2021.

The announcements were met with great enthusiasm at a gathering of officials and stakeholders including Member Customs Operations Dr Jawwad Uwais Agha, World Bank Country Director Patchamuthu Illangovan, Project Director Imran Mohmand, and economists and resident officials from the Asian Development Bank. Everyone present touted the idea that the NSW will be helpful in improving trade and 'provide a comprehensive solution for imports, exports, transit trade, trade through border customs stations and air cargo.' But what actually is the NSW? How it is expected to work? What is the likelihood of it working in Pakistan? And can it be expected to impact Pakistan's export sector woes in any positive way?

The project is to be completed at an approximate cost of $163 million (around Rs 25 billion or 25,000 million Pak Rupees). This is clearly a major undertaking. For context, the amount is equivalent to the money allocated for the Green Line Bus project (Rs 24.6 billion), approximately 5 times the funds given for the Karachi water supply scheme (Rs 9.6 billion), and almost three times the Prime Minister's National Health Programme (Rs 8.179 billion). But where these projects, with their significantly lower funding, have clear goals for the public, the NSW still wades murky waters regarding exactly what it is supposed to do.

It is pertinent to mention here that the establishment of NSW system by 2022 is a basic requirement under the World Trade Organisation (WTO) Trade Facilitation Agreement to which Pakistan is a signatory. The question, therefore, is not whether to establish such a system or not, but what are the prerequisites that need to be included in the business plan before its formal approval to avoid it becoming another PSM or PIA, and what will its impacts be once it is in place.

Operational and Business model of NSW

The business model for execution and operations as well as alignment of participating departments had been approved by the Steering Committee back in April, 2019. The draft legislation for NSW has been prepared while the functional, revenue and technical models are expected to be finalized by June, 2019. Though the government has allocated funds in the upcoming PSDP, however, customs is currently providing funds from...