Exporters seek coordinated 'Plan B'

The country's exporters have urged the federal government to prepare a coordinated "Plan B" by taking them on board to deal with devastating affects of COVID-19 on economy instead of just issuing statements.
Prime Minister's Advisor on Commerce, Industries and Production, Abdul Razak Dawood said last week that the government had assured the businessmen that the government would not allow cash flow crisis to take place nor business to go bankrupt because of it.
On Monday Secretary Commerce Sardar Ahmed Nawaz Sukhera in his tweet requested all exports facing order cancellations by their foreign buyers to contact Pakistan's Trade and Investment (TIO) officers in the country concerned to approach the buyers to assist them in retaining the orders.
Talking to Business Recorder one of the exporters said that since all the factories were closed due to COVID-19 related restrictions imposed by the government, information about orders' cancellations information has not been gathered or received so far.
"As the factories reopen after the situation improves, all Associations will get latest information from their members to subsequently share with the concerned Ministries," he added.
In reply to a question, he said that export orders which had been cancelled or those orders which were half-ready had been pended for next two-three months. The situation in Karachi, Lahore, Faisalabad and Sialkot is similar with respect to foreign orders.
"The consignments of finished goods worth millions of dollars which were ready to dispatch are shipped immediately, the financial woes of exporters can be resolved to some extent," he continued.
On March 20, 2020, he told this scribe that exporters informed him that international chains like, GAP, Zara and Lewis are asking them to hold shipment, which implies that if shipment is on hold, exporters will face liquidity crunch. He said approval had been granted and release of Rs 9.3 billion had begun. However, the remaining balance of Rs 10.5 billion will be released in the first week of April 2020 staring from tomorrow.
Commenting on the Commerce Ministry's suggestion to exporters to approach TIOs in Pakistan embassies, exporters stated that the buyers were also facing bankruptcies and in that case TIO could not resolve this crisis.
Recession is not limited to Pakistan but also in developed countries like Europe and US where big buyers are also filing bankruptcies. Countries like India and Bangladesh are also crying as the entire textile chain is halted and the situation is alarming.
On March 30, 2020, All Pakistan Textile Mills Association (APTMA) in a letter to Abdul Razak Dawood said, retail stores had closed in Europe and the US and were not going to take any shipments for the next 90 days and were also not paying for shipments made during the last 30 days.
The country needs to protect the jobs of millions of workers who are directly employed which can only happen if industry stays afloat and for industry to stay afloat and keep paying workers the government needs to ;(i) freeze interest cost- SBP to issue directives to suspend interest on long-term as well as working capital loans/ advances from January 2020 till June 30, 2002. Rs 100 billion relief announced by PM may be used to defray this cost;(ii) one-year deferment of installments against all loans and ;(iii) clear S.O.P for manufacturing operations to restart production and provide economic activity starting April 7, 2020. For this purpose, APTMA has proposed constitution of monitoring committees at district level and provincial level in Punjab and Sindh to follow the S.O.Ps.
When contacted, Ijaz Khokhar of Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) said that exporters were more worried about workers instead of their businesses.
"We will survive for a few months but how will labour cope without any income," he questioned.
In reply to a question, Ijaz Khokhar said the government should formulate Plan B (short-term and long-term) in consultation with textile sector, food sector, pharmaceutical and other export-oriented sectors.
"The government should sit with the stakeholders either through physical presence or video conference to prepare a well coordinated Plan B to deal with the crisis as about 3 million manpower of garments sector is out of a job," he continued.
Ijaz Khokhar suggested that the government should give money to jobless workers through their employers who were also ready to match whatever amount was given by the government.