Industrial production to take a hit due to extended Eid holidays: FPCCI

The Federation of Pakistan Chamber of Commerce and Industries (FPCCI) has said that the five-day long Eid holidays would inflict a dent on productivity, and cause a loss of 16% to the output of industries in the country in July 2022. Subsequently, it called for reduction in holidays and reversing the decision to observe closure of industries on Saturdays.

“The export-oriented sector and allied industries will suffer from a prolonged Eid break while the spillover effects of the productivity loss will continue to hamper production in the months to come,” said FPCCI President Irfan Iqbal Sheikh in a statement.

“The industrial sector is already struggling with electricity and gas load-shedding, political and economic instability, poor law and order situation and worsening ease of doing business in the country,” he said.

“At such a time, the government has announced five-day holidays for Eid-ul-Azha without holding prior consultations with the businesses and industries.”

Sheikh decried that unrestricted and unscheduled load-shedding had already caused a loss of over $1 billion in exports to Pakistan while many orders were facing the danger of delays or cancellation.

Sheikh noted that the country was struggling to increase exports, boost import substitution and bridge the ballooning trade deficit – which clocked in at $48.3 billion for fiscal year 2021-22.

It is pertinent to note that the trade deficit is the most important factor causing the balance of payment crisis in Pakistan.

He highlighted that Pakistan did not fare well on the productivity index either because Pakistan’s labour productivity was estimated at half of that of China, according to the International Labor Organization (ILO).

“Our domestic labour productivity is far less than our regional and sub-regional competitors,” he said. “The private sector has to compete in regional and international markets while bearing this burden.”

Sheikh urged the government to immediately withdraw the Eid holidays notification and restore Saturdays as working days for banks and other financial institutions, legal system and trade and economic facilitation organisations. He held the view that this would enable the trade and industry to function smoothly and produce at the maximum capacity.