KARACHI: Chairman Businessmen Group (BMG) & Former President Karachi Chamber of Commerce & Industry (KCCI), Zubair Motiwala has urged that the government will have to prioritise relief and rescue activities throughout 2021 by sharing the burden of business community.
While expressing serious concerns on the prevailing business environment, he said that host of businesses are still struggling to remain afloat while many have turned into sick units after getting severe battering due to the Covid-19 pandemic related long staggering lockdowns and global economic slowdown.
Zubair Motiwala said that during the period when businesses, particularly SMEs, were trying to overcome the losses of the initial wave of Covid-19, the second wave erupted. “This wave is proving to be more dangerous and continues to haunt the economy, trade and businesses in 2021.
The severity of the situation can be gauged from the fact that for the first time since 1952, Pakistan’s GDP posted a negative growth of 0.4 percent in FY20 whereas, the Large Scale Manufacturing sector recorded a drop of 10.17 percent, inflation at 10.74 percent and current account posted a deficit of $2.96bn.
The year 2020 even saw a 7-year high inflation figure of 14 percent in Jan’20 and an unprecedented drop in LSM output of -22.95 percent in Mar 20, -41.89 percent in Apr 20 and -24.8 percent in May 20 as compared with the respective months of 2019. The prices of electricity, gas and even essential commodities such as wheat, sugar, oil, meat, eggs, vegetables, medicines, witnessed an unprecedented surge even at time of pandemic in 2020,” he added.
He further pointed out that thousands of businesses particularly small businesses and traders have shared their distress stories and fears of going bankrupt with KCCI therefore, it has become inevitable to declare 2021 as the year of ‘Relief & Rescue’ in the supreme national interest otherwise numerous businesses would completely fade away, which would further worsen the economic woes, destroy business activities, give rise to poverty and unemployment and may also trigger anarchy all over the country.
Zubair Motiwala appreciating last year’s relief measures including Rs1.2 trillion corona bailout package, Chota Karobar Scheme subsidising electricity bills, incentives for construction sector, substantial cut in interest rates, Deferment of Principal Amount of Loans and Refinance Scheme for Payment of Wages & Salaries and the Industrial Support Package (ISP) announced by Prime Minister that offers additional consumption of electricity to small and medium enterprises/industries (SMEs) at 50 percent less rates, said that the business and industrial community appreciates all these steps but keeping in view the gravity of the situation and the severe crises being faced by all the industries, there was a dire need to do more in 2021.
He explained that shopkeepers and Small & Medium Enterprises (SMEs) usually have two major unavoidable expenditures including the rental payment for premises and salaries payable to workers. These small traders, shopkeepers and SMEs, who lost all their savings in dealing with the extraordinary situation caused by Covid-19 pandemic in 2020, desperately need to be rescued in 2021 hence the government should urgently devise some kind of an effective mechanism to share half of the burden of the rent of business premises while 50 percent of salaries payable to workers must also be borne by the government, to ensure survival of many shopkeepers and SMEs and avert massive job losses.
Copyright Business Recorder, 2021