Need stressed to bridge yawning trade imbalanceSeptember 22, 2014
KARACHI: The Union of Small and Medium Enterprises (UNISAME) has invited the attention of the federal finance minister Ishaq Dar to the increase in trade deficit by 28% in only the first two months of the current fiscal year obviously due to increase in imports and decline in exports and urged him to consider restrictions on luxury goods and goods of international standards manufactured in the country.
President UNISAME Zulfikar Thaver said Pakistan’s trade imbalance recorded at $4.243 billion during July-August period of the financial year 2014-15 as against $3.308 billion of the corresponding period of the previous year showing a decline of 28.3 percent. This is indeed an alarming situation and deserves the best focus of the government.
He pointed out that due to World Trade Organizations (WTO) promotion of free trade regulations the government cannot ban the imports of any item and place it on the negative list of imports but it can surely check the imports made from undisclosed money.
Huge imports are made from money not declared in the books and one can witness the imports of innumerable items from foodstuffs, textiles, electronics, footwear, cosmetics, medicines, vehicles, engineering goods, parts and accessories even though goods of superior quality and bench mark are made in Pakistan. Imports have increased by 40.3%.
It is very disheartening to note that soft drinks, confectionery, stationery, clothing, leather goods are also imported and one fails to understand that when these are processed in the country what is the need to spend valuable foreign exchange on these items.
There are merchants who are importing goods in ship loads and distributing throughout the country and also passing it across the borders and they have huge funds at their disposal. Remittances are made for imports without any check and US Dollars are purchased from open market and also from commercial banks to pay for import bills. The importers maintain a strong supply line and maintain a big inventory and keep importing goods on a regular basis.
Thaver said if imports are allowed only with money in the books then they will be reduced considerably which will reduce the trade deficit and also promote domestic industry. Secondly the domestic industry will increase their productivity and standards.
The government needs to promote manufacturing under foreign collaboration and facilitate new comers and overseas Pakistanis who could bring imported technology for the manufacture of import substitution items.
It is very important that the chief minister’s investment cells in all the provinces are reopened to promote investment under experts.