Domestic Commerce: Key Issues and Possible Interventions

PIDE Knowledge Brief No. 25:2021
Publication Year : 2021

Domestic Commerce historically has been ignored by both policymakers and researchers in Pakistan to date. This is reflected in the reflected by the dearth of existing research on domestic commerce and its potential for driving economic growth. 1 The poor state of domestic markets is reflected in the Global Competitiveness Index rankings. Pakistan is currently ranked in the bottom 30th percentile for its “Product Markets” and “Financial Systems”.2 (Rank 126th for Products Markets and Rank 99th for Financial Systems) Despite collectively accounting for more than 50 percent of GDP (See Figure 1) and employing nearly one-third of the total labour force (See Figure 2), the domestic commerce sector has not enjoyed any substantial level of support from the policymakers in the country. The policymakers have traditionally adopted mercantilist policies which were targeted towards promoting the manufacturing sector to increase their export capacity. Furthermore, the agriculture sector has also been another favourite of the policymakers as there is political and social clout surrounding it. The domestic commerce on the other hand has never been properly researched and facilitated.