Policy makers asked to benefit from oil prices reduction

KARACHI: The Union of Small and Medium Enterprises (UNISAME) has called upon the policy makers to benefit from the reduction in oil prices wisely and take this as golden opportunity to curb inflation, reduce cost of production, promote investment and increase exports.

President UNISAME Zulfikar Thaver said in a statement that the prospects were very bright for 2015 and Pakistan would become competitive in many commodities but it was very important that the government reduce its own expenses and declare austerity as a very first step. Secondly, full throttle action is required to promote value addition and exports. Thirdly, a strict eye on imports is necessary to discourage imports of the unnecessary.

He lamented that the government was not taking steps to promote domestic industry and not protecting it as a result imports were increasing and many items which were manufactured in Pakistan were being imported in bulk and dumped in the market.

The SME units were discouraged and not planning to increase production, to modernize and upgrade their products due to tough competition from imported items.

“The importers were under invoicing their imports and also importing goods with undeclared money. There is no check on imports as imports of all items are allowed whether they are made in the country or not due to WTO regulations the imports cannot be disallowed.”

Thaver urged the policy makers to examine the imports and impose regulatory duty on imports of items manufactured in Pakistan otherwise Pakistan is fast becoming a trading economy.

“The country is exporting goods worth US dollars 24 billion and importing goods worth US dollars 45 billion. Fortunately, overseas Pakistanis are remitting US dollars 15 billion which is saving the situation, otherwise the balance of payments would be precarious. There is also foreign debts and internal debts and deficits which are increasing and increasing the burden but the government is not serious although it is a situation which could cause deep concern to the economist.”

UNISAME conducted a survey and found that the new industries were not being set up due to energy crisis, poor law and order, competition from Chinese goods, lack of marketing support for exports, poor infrastructure for farm produce and poor logistics.

The other draw backs are lack of finance, leasing, insurance and taxation policies. Many entrepreneurs also complained about corruption, extortion and environment. Some even mentioned the high handedness of government officials and difficulties in lodging FIR and misconduct of policemen.

One important issue raised was of lack of information and entrepreneurs complained that the related trade promotion bodies have no satisfactory information bureau to answer queries. One exporter of bananas wanted to know what is the import duty on bananas in different countries and nobody was in a position to give the correct answer and the exporter was keen to export the fruit to the different countries as he was a farmer and growing the fruit.

It is very important that the information bureau is set up in the trade promotion body capable of providing information as information is the key requirement of any entrepreneur.

It is high time the government gets into gear and takes positive bold steps to benefit from the favorable aspects of reduced oil prices and strengthen the economy before the situation takes a turn. It is expected that the oil prices will remain such for about one year and in this period the government must act diligently to benefit from the situation.

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