By Samia Khalid ISLAMABAD, Jan. 26 (INP-WealthPK): It is crucial for Pakistan to identify industries where it has a latent comparative advantage (LCA) to achieve its objectives quickly by reducing the country’s trade imbalance. A Chinese economist, Justin Yifu Lin, introduced the Growth Identification and Facilitation Framework (GIFF), an industrial identification approach. This framework enables the policies of a country to be focused and unambiguous within its industrial prioritisation. When they enter into some new contracts with trading and cooperating partners, they have knowledge of both comparative advantages and disadvantages. The GIFF lays out a step-by-step approach for policymakers to facilitate structural change based on the framework of “New Structural Economics”. The GIFF was introduced to assist countries with similar economies to expand by identifying industries with LCA. This identification aids an economy in determining its strengths based on natural resources and other inherent qualities. For decades, Pakistan's economy has been besieged on the export front, resulting in trade and current account deficits. Despite the fact that the government has previously proclaimed various industrialisation initiatives, no major change has been witnessed. According to available statistics, Pakistan has experienced persistent trade deficits since FY2010. But after FY2018, Pakistan's trade balance started improving. In FY2020, the trade deficit was recorded at $23.87 billion, according to Statistica. Exports are a significant contributor to an economy's growth and development. Unfortunately, despite various industrial initiatives, Pakistan has not achieved traction in this area. Earlier industrialisation strategies have failed to deliver for a variety of reasons, including a lack of competitiveness, insufficient infrastructure, product innovations, low factor productivity, and poor foreign marketing of Pakistani products. However, in an encouraging sign, during the period July-December FY2021, the textile group was at the top of other groups in exports with a value of $9.38 billion, surpassing other groups, according to the Pakistan Bureau of Statistics. It is important to figure out in which industries Pakistan has a competitive edge because of its low labour costs and abundant resources. Due to their cost-effective production, they will have a strong competitive position in the worldwide market. As a result, securing the market for low-cost, high-margin commodities would lead to long-term, dynamic growth, which is the only way for a developing country like Pakistan to move up the economic ladder. Pakistan possesses a latent comparative advantage in some labour-intensive products that might be encouraged to become export engines. Footwear, clothes, video and radio equipment, trunks and cases, cotton yarn, iron, agro-processing industries, dyeing and colouring materials, printing industry, glass and glass wear are just a few of the sub-sectors that might help boost exports in future. Now, there is a chance for Pakistan to get its economy back on track through the China-Pakistan Economic Corridor (CPEC). The core economic restrictions of Pakistan, such as infrastructure and energy shortages, have already been addressed. Now, in the second phase of CPEC, the manufacturing sector would be transformed by industrial collaboration with China through the creation of Special Economic Zones (SEZs) under CPEC. SEZs are viewed as economic engines as they will boost trade with a broadening export base, expedited urbanisation, and other social benefits. The SEZs will promote industry agglomeration, resulting in cost-effective innovations and high-value-added goods. As a result, the products of Pakistan will be more cost-competitive in the global market. This will also boost exports by allowing Pakistan to reap the advantages of a lower trade deficit. The CPEC Phase-II is also bringing a variety of projects to Pakistan that are vital to the economy and stimulates both local investment and foreign direct investment (FDI). The industrialisation plan is being modified in order to make it simple for foreign investors to engage in Pakistan, and an attractive incentive package is being offered to entice the FDI. Pakistan should identify industries that have LCA and carefully plan if they are intended to attract investments and industrial relocation from China to meet its objectives at a faster rate.