December 16, 2022 (MLN): Non-issuance of Letter of Credit (LCs) and energy shortage has terribly affected the overall industrial activities as well as the exports, President Karachi Chamber of Commerce & Industry (KCCI) Mohammed Tariq Yousuf said.

The emerging situation would not only have a devastating impact on the already ailing economy but would also terribly affect the lives of millions of poor masses due to massive layoffs soon, he added.

In a statement issued, President KCCI asked how long would any industrialist bear the burden of paying salaries and wages to most of the idle employees and labor force as they were unable to produce according to their capacity due to the unavailability of imported raw materials and spare parts in addition to severe gas shortages.

“We fear that if steps are not taken on a war footing basis many industries may close down forever”, he added.

Referring to the CEO’s remarks of a well-known company engaged in manufacturing home appliances, he said that it was really worrisome that they have fired 1,000 employees and will further be retrenching 2,000 more which means that a total of 3,000 families would suffer badly.

He said, “Similar is the story with hundreds and thousands of other industries all over Pakistan who are also thinking of downsizing their workforce due to very limited production.”

He was of the opinion that stopping the imports of raw materials and other essential goods to save dollars was purely an imprudent move as this was proving to be counterproductive for the economy by terribly affecting industrial production, reducing exports, and raising unemployment across the board.

“The policymakers will have to act sensibly otherwise, the suspension of LCs would trigger uncontrollable chaos and plunge our beloved motherland into more and more crises”, he cautioned.

He informed that thousands of SBP’s approval cases were already pending under Chapters 84 and 85 and instead of providing some relief, the issuance of LCs has been completely stopped which was not making any sense.

Limited industrial activities would also cause a severe shortage of goods including lifesaving drugs and other medicines being supplied in the local markets and add more fuel to the unbridled fire of inflation, President Tariq Yousuf said.

He was of the view that State Bank’s strategy to control imports by stopping LCs was being done by compromising the industrial performance, exports, and revenue collection which happens nowhere around the world.

No, any country even thinks of taking such a harsh, anti-economy, and anti-business step hence, it simply cannot be applied here under the present circumstances when the country desperately needs higher production and excellent export performance.

He said that although foreign investors from some of the most developed countries find Pakistan as a profitable market they prefer to stay away when they see unsustainable policies, political uncertainty, unpopular decisions like stopping the LCs, and severe energy crises.

“We fear the existing meager foreign direct investment in Pakistan would also fly away soon if corrective measures are not promptly taken”, he added while referring to his discussions with diplomats from friendly countries who have been expressing skepticism about Pakistan’s investment climate.

President KCCI fervently appealed to Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar to take notice of the situation and intervene in this most perturbing matter which was badly hampering industrial production.

There was a need to implement effective and doable strategies which ensure that the industries keep on operating at full capacity which was the only way forward to save the economy from reaching a point of no return, he added.

He hoped that this issue being suffered by the business & industrial community for several months will be given due attention and amicably resolved in the larger interest of the country.

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Posted on: 2022-12-16T14:31:49+05:00