Forecasts of WB, IMF indicate dismal economic outlook: Razak

Prime Minister's Advisor on Commerce and Investment, Abdul Razak Dawood Wednesday said that Pakistan's economic condition is very critical due to spread of Covid-19 and forecasts of the World Bank and the IMF indicate a dismal economic scenario.

He was talking to media after attending the National Assembly Standing Committee on Commerce which met with Syed Naveed Qamar in the chair.

"We will sit in the Ministry of Finance to discuss and analyze the projections of both the IMF and World Bank but one thing is for sure that situation for Pakistan is critical," he added.

In reply to a question, the Commerce Advisor said that Pakistan's exports are expected to decline by $ 3 billion due to the coronavirus and added that exports have declined by 70 percent during current month.

Answering another question, Dawood said that talks are in progress with the State Bank of Pakistan (SBP) with respect to deferment of loan payment by business community. He, however, avoided answering a question on the possibility of sugar export, which actually is considered a key reason for increase in its price.

Earlier, briefing the committee, Abdul Razak Dawood said that the government has asked State Bank of Pakistan to defer industrial loans, adding that banks are not cooperating with business community.

"Commercial banks are seeking more guarantees to defer loans and government is in contact with the central bank," he added.

According to Commerce Advisor, Bangladesh government has decided to extend loans to businessmen at 2 percent interest, and Pakistani government is also considering similar proposal.

Secretary Commerce, Sardar Ahmed Nawaz Sukhera informed the committee that Trade Development Authority of Pakistan (TDAP) will certify exports' consignments, as there is a possibility of shortage of commodities in the country in case of unchecked export.

He said, restrictions have been imposed on export of N-95(Mask), adding that permission of Ministry of National Health Services is mandatory to export masks.

He further informed the committee that textile sector has sought permission to export masks. The mechanism for exports has been devised in the light of directions of Prime Minister and TDAP has been given important responsibility.

Secretary Commerce further stated that according to the rules of business every Ministry has its own role. He stated that the subject of sugar and wheat are with the Ministry of Industries and Production and Ministry of National Food Security and Research.

"Commerce Ministry is unaware of the possibility of export of sugar and wheat," he added.

However, the Commerce Advisor noted that the decision to export one million tons of sugar was taken by the Economic Coordination Committee (ECC) of the Cabinet, adding that 2.5 million surplus sugar was available in the country when the ECC took this decision.

Dawood said that tractor harvest thresher industry, cement and chemical industry have been opened.

The committee was informed that 1,900 Afghanistan-destined transit containers are struck at the ports in Karachi. The committee directed Federal Board of Revenue to clear the consignment on war footing. The committee observed that there are substantial difficulties in exports due to Covid-19. Pakistan's key exports are textile related.

The committee was of the view that exports should begin with Afghanistan as the neighbouring country.

Briefing the committee on Afghan transit trade Additional Secretary Commerce Javed Akbar Bhatti informed the committee that there is no restriction or ban on trade with Afghanistan. He said, trade with Afghanistan will commence within a few days.

"We are also starting bilateral trade with Afghanistan in addition to transit trade," he said adding that Kinnow stored in cold stores will soon be dispatched to Afghanistan.

Rana Tanveer suggested that industrialists should pay salaries of one month to their workers from their own pockets.

According to official statement, the committee was briefed on the performance review of Ministry of Commerce during last one year, Pakistan's trade analysis during current fiscal year and steps taken for Mitigating Covid -19 related issues under Ministry of Commerce.

The Advisor on Commerce informed the committee that 61 essential medical items identified by ministry of National Health Services were exempted from all duties and taxes on March 20, 2020, and a ban on export of 10 essential medical items was notified on March24, 2020.

He added that in support of countering health emergency Expo centers at Karachi and Lahore were given to respective Provincial Governments for setting up field hospitals.

He further stated that to facilitate businesses refund of Rs 47.5 billion were paid in the last 100 days in textile and non-textile regions. He said that he himself and secretary Ministry of Commerce held a number of consultative sessions with top exporters and chambers to assist and formulate strategy to deal with Covid-19 related challenges and offer all kinds of assistance they require from MoC, TDAP and Trade and Investment Officers (TIOs) posted abroad.

He said that a special cell has been constituted in MoC under advisor commerce with secretary Commerce, additional secretary and secretary TDAP as members with the committee interacting through Videocon daily with Presidents of FPCCI and chambers of commerce and industry of Karachi, Lahore, Sialkot, Gujranwala, Rawalpindi and Islamabad.