Reform abuse

June 10, 2021

LAHORE: Reforms in Pakistan are announced with fanfare. The electorate is promised that these reforms would benefit the common man and eliminate mafias. However after initial thrust business as...

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LAHORE: Reforms in Pakistan are announced with fanfare. The electorate is promised that these reforms would benefit the common man and eliminate mafias. However after initial thrust business as usual is permitted.

This regime a few months after assuming power took a bold decision on import of fast moving consumer goods (FMCGs), making it mandatory that importers would print all information about the contents in Urdu in addition to the other language printed on the packing.

Another condition imposed was that any edible items entering Pakistan should have a minimum expiry date of six months. These two conditions adequately protected the interests of the local consumers. There are numerous importers of FMCG. They import all kinds of chocolates, juices, frozen fruits, porridges, etc from abroad.

In fact each big or medium-sized grocer brings in 20-40 feet containers loaded with assorted goods to be marketed in their various outlets in the country. There is apparently nothing wrong with this practice. But those that travel abroad know that when certain food items are near their expiry dates they are disposed of at high discounts so that they could be consumed before expiry.

There is a possibility that some unscrupulous importers might collect these near expiry items and bring them to Pakistan. Perhaps this possibility was also felt by the planners that came up with the dual idea of labels in Urdu and minimum six months expiry date. The rationale behind insistence on Urdu label was that most people in Pakistan cannot understand any foreign language and this deprives them of much vital information about the adverse impacts of the product on their health.

Moreover, they had the right to know the expiry date in their native language. In fact even English was not the language of many labels. The languages included French and German which hardly 0.1 percent of Pakistanis are well versed in. This was done to shield the consumers from unethical imports of lots nearing expiry date bought dirt cheap and retailed at original price. When these conditions were imposed there was a great hue and cry from not only the large grocery outlets but also from a few multinationals.

After these decisions hundreds of containers got stuck. It is worth noting that most of the FMCG are procured worldwide from the original manufacturers or their certified distributors. In Pakistan’s case these goods are collected from different sources that are not necessarily the legal agent of the producers. Since the items are procured from retail or wholesale markets in Dubai, Singapore, or Hong Kong.

These sellers cannot print labels in Urdu because the quantity available is not enough to warrant commercially viable printing. These secondary sellers do not guarantee the quality as well but their rates are sometimes 50 percent less than the original rates of numerous edible brands. The expiry date obviously is shorter as goods remain with wholesalers or retailers for two to three months.

The aim of this reform was probably to streamline and ensure quality edible imports. If, for instance, the juice or chocolate of a particular brand is imported through the original manufacturer or its certified agent (that the company could even appoint in Pakistan or Dubai) then the quality of the item would be assured.

At the same time the quantity would be enough to get the instruction and name of the product in Urdu. This practice is in vogue in the Middle East, India, and China. It can be implemented in Pakistan as well. When this directive was issued most of the FMCG importers lamented they were caught off guard as they had hundreds of containers in the pipeline. They asked for some time to comply with the conditions of the directive.

The relaxation was granted after a lot of resistance from the state planners. It continues even today about two years after the directive was notified. Why has the state machinery not implemented the law? Are the rent-seekers protecting the importers? These are the questions that arise every time a reform is announced and then derailed by the bureaucracy. Sometimes even the political elite are also involved that support a soft approach even after almost three years.

The used car imports were subjected to payment of the price and all import levies from the account of an expat Pakistani in his country of residence. Now the payment in foreign exchange can be arranged even from Dubai. We somehow find out ways to bypass reforms be it the condition of CNIC (Computerised National Identity Card) on purchases or documentation of retailers.

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