The leading representatives of the industry and enterprises showed their confidence in the government of Pakistan’s timely interventions to insulate the industry from being affected by the COVID-19 pandemic.
The representatives said this in a virtual meeting of the high-powered ‘Industry and Enterprise’ subgroup of the Planning Minister’s Advisory Committee.
Appreciating the State Bank of Pakistan’s (SBP) deferment of loans and temporary economic relief facilities, they suggested that the government should do more to protect micro and small enterprises from the direct and indirect effects of the possible second wave of COVID-19.
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They also highlighted the need for the establishment of an internationally-recognized certification laboratory that will certify exports to the Middle East and to the European Union according to their standards.
In the absence of such a laboratory in Pakistan, exporters first have to send their samples to China to get the required certification.
In case of restrictions on air transportation during the second wave of COVID-19, Pakistan’s exports to these destinations are likely to be severely affected.
Dr. Abid Qaiyum Suler, the group’s Convenor and member of the Advisory Committee, remarked that the government is trying to reach out to the stakeholders of the private sector to understand and address their needs during the pandemic.
“In the short run, the purpose of getting feedback from the leaders of industry is to enable the government to come up with a demand-driven and evidence-based policy response to protect businesses during these testing times. In the medium to long run, this group can help the Planning Commission to tailor its initiatives that may stimulate sustainable growth and economic recovery” he said while giving an orientation about the establishment of the subgroup.
Asim Saeed, Planning Commission Member, said that as a key planning agency of the government, the Planning Commission believes in engaging with all the stakeholders.
“In this case, we want to come up with doable initiatives which have a complete buy-in of industries,” he said.
Managing Director Hub Leather Group, Asfandyar Farrukh, said that reopening of business activities had helped to honor export orders. Terming cashflow and the liquidity crunch as ‘a major challenge for the retail sector during COVID-19’, he urged the central bank to devise a mechanism to lend money to the retail sector based on its banking transactions and other taxes.
Engr. MA Jabbar, Chief Executive Qaim Automotive, highlighted the disparity between the ease in the customs duties that are provided to the exporters and manufacturers for local supplies.
“The government needs to provide some tax breaks amidst COVID-19,” said Jabbar.
Shanza Anwar from Steel Castings Group termed the shortage of steel scrap, a basic raw material, as ‘the biggest challenge for the steel industry’. She pointed out that one of the biggest markets for Pakistan fans, Saudi Arabia, has an additional certification requirement.
“These laws were changed during the times of COVID-19 and most of the industry players were not aware of them. This caused our consignments to get held at Saudi ports of entry. We have to send fans to China for testing and certification,” she said.
The attendees unanimously declared that the government must ensure that Pakistan has local internationally-accredited laboratories for uninterrupted exports.
Zafar Masud, President of the Bank of Punjab, called the deferment of loan repayments by the private sector and the Temporary Economic Relief Facility (TERF) by the SBP ‘a major relief measures for the industry. He also emphasized spreading awareness about employment initiatives, the Kamyab Jawan Program, and the Punjab Rozgar Scheme.
Masud also expressed his concerns about the possible default of many industries in FY22 and said that the banking sector should work on minimizing the fall-out effects of COVID-19 in FY22.
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Waqar Ahmad of Nestle Pakistan and Afghanistan discussed the impacts of COVID-19 on the food and beverage sector and said that multiple shutdowns of production plants to repeatedly disinfect them is increasing the cost of production.
“The beverage sector has struggled to recover as schools and large gatherings were curtailed during the peak sales season which is summer” he claimed.
Ahmad stated that the government needs to ensure the smooth movement of food items during the future waves of the pandemic.
Muhammed Ashraf, Former President Sialkot Chamber of Commerce & Industries, raised the issue of the new certification required to export to the EU from February 2021.
“These tests are extremely expensive, and we don’t have an internationally accredited laboratory in Pakistan. This would hamper export of medical and surgical goods to the EU”, he added.
Ashraf also suggested that a Special Economic Zone be established in Sialkot to facilitate cleaner and greener production by reducing industrial waste.
Rahat Kaunain, Chairperson, Competition Commission of Pakistan reiterated the need for protecting the SME sector during the pandemic.
“We need figures and updated data evidence to see how SMEs can be helped further”, she opined.
Dr. Vaqar Ahmed, JED SDPI, highlighted the need for a stronger public-private dialogue at a sector-specific level.
“The digital transformation of businesses is important during the pandemic. The implementation of e-commerce policy should be expedited” he said.
The recommendations of the subgroup will be presented at the Planning Commission Advisory Committee on 25 November.
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