The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has warned of industry’s closure in the wake of constraints on import of raw material.
It pointed out that restrictions imposed on import of raw material under the customs tariff chapter 84 and 86 had not yet been lifted despite the country had received the loan tranche from the International Monetary Fund.
FPCCI former president and BMP Chairman Mian Anjum Nisar observed that the business community was expecting that the imports restrictions would be relaxed as soon as the country received the IMF loan, but it was unfortunate that the situation had not changed mainly due to mismanagement by the authorities, according to a media release received by WealthPK.
He stated that the import restrictions under customs tariff chapter 84, 86 continued to haunt the trade and industry, leading to severe shortage of raw material, as the authorities have not fulfilled their promises in spite of several reminders and meetings.
“If import of industrial raw material, parts and machinery is halted, the industry will stop running gradually, leading to inordinate delay in meeting export orders and damaging the reputation of Pakistan, as some of the sectors have already slashed their production because they are in a difficult situation in the face of growing currency crisis,” he pointed out.
Anjum Nisar said the State Bank Foreign Exchange Department (FEOD) had made customs tariff chapter 84, 85 import payments conditional on its approval. “Commercial banks, under the State Bank’s condition, will not make dollars available to the importers. After the circular issued by the FEOD on July 5, the import of every kind of plant and machinery, capital goods and raw material has stopped. As a result, hundreds of consignments are stuck at different ports and almost same number of consignments are on their way.”
Moreover, he said hundreds of consignments remained stuck at ports after government had slapped a ban on the import of luxury items. “The importers now have to pay heavy demurrage to the shipping companies, as the government did not fulfill its commitment of waiving off demurrage and detention charges.”
Anjum Nisar said that the industry needs a supply chain to run the whole economy and that big industries require raw material all the time. He said the State Bank’s decision severely affected almost all industries negatively. “The most concerned are those industries whose consignments have reached the port and are being asked by the suppliers to pay the bill but the State Bank is still creating hurdles. Though importers have the money but they are unable to send the amount to them.”
He said those who imported goods under Cash Against Document (CAD) were of the view that their clients were getting angry with them as they were not able to make payments timely.
Moreover, he also appealed to the government to immediately give directions to the finance ministry and the central bank to play their due role in keeping a check on the banking sector and stop exploitation of the trade and industry by charging exchange rate unfairly. He also lashed out at the government over the volatile exchange rate despite arrival of IMF loan tranche, fearing it will stoke inflation and halt economic growth by hurting all important sectors.
He also urged the government to appeal to the IMF to ease its harsh programme conditions that require the country to further increase electricity prices and taxes on fuel over the next six months in return for receiving the remaining loan of nearly $3 billion.
He urged the IMF to provide upfront the remaining loan of $3 billion and allow a pause in the increase in electricity prices and petroleum levy for four months. He said that the purpose of seeking the moratorium on the implementation of these conditions was to ease the inflationary pressures on the trade and industry.
Credit : Independent News Pakistan-WealthPk