Introduction
Exports are widely believed to play a crucial role in the development process. Exports lead to an improvement in economic efficiency by increasing the degree of competition. For the same reason, number of initiatives have been undertake to achieve export-led growth in Pakistan.
In 1999, Export Development Fund Act (EDF) was introduced to strengthen and develop infrastructure for promotion of exports.
A number of projects have been approved for enhancement of various industries under EDF. Taking for instance the example of leather industry, for which an amount of Rs. 881.917 million has been provided from 1992-93 to March 5, 2013 from EDF. However, the performance of the industry exhibits a mix trend as exports of leather garments during 2008-09 were $392.5 million, which increased to $404.3 million in 2010-11, showing an increase of 3 per cent. Then, in 2011-12 the leather garment export came down to $341.0 million dollars indicating a decline of 15.6 per cent in terms of value and 13 per cent in terms of quantity.
Despite the recurrent performance of industries, total exports of Pakistan are suspended around $18-20 billion for last few years. There are no procedures to assess the significance of funds such as EDF and absence of studies on the said topic is a challenge for measuring the overall impact on exports performance.
The current study is the first attempt to provide the structure of EDF fund, its purpose, the process by which the funds are allocated, issues and challenges faced by beneficiaries and the recommendation to make the fund effective.
