LAHORE: Chinese and Indian diaspora played a major role in taking their countries to another level in technology and manufacturing, as their governments provided them better incentive on investment. Pakistani diaspora has encouraged bringing foreign products for local consumption.
There is no incentive for them in Pakistan for establishing industries or buying local products at concessional rates if they pay in foreign exchange.
Today, almost 40 percent of the foreign investment in China has been made by their diaspora living in developed economies. A major chunk of foreign investment in India has been brought by their nationals who earned the money abroad. We can hardly name a person or two who have invested their foreign earnings in Pakistan.
Our planners have promoted a culture where the persons living abroad are allowed to bring in a used vehicle if their stay outside Pakistan exceeds six months. No one bothers to know that the beneficiary might not have remitted a single penny to Pakistan during their stay that may extend to years.
For our planners, merely staying outside Pakistan is a distinction deserving rewards. The used car facility was grossly misused until the country came under the Financial Action Task Force scrutiny that suspected it as a vehicle for money laundering.
Now the expat wishing to import a car to Pakistan has to pay the price of the used car through his personal foreign account that he/she operates in the foreign country. He/she also has to pay the prescribed government levies on import in foreign currency from the same account.
This step has almost stopped the commercial use of this facility. But the planners feel that overseas workers deserve more.
The Engineering Development Board has forwarded a request of overseas Pakistanis to allow free import of one hybrid car up to 3000cc to those that remit $100,000 in last two years.
Pakistan Automobile Manufacturers Association, and Pakistan Association of Auto Parts and Accessories Manufacturers have been asked to give their input in this regard.
A 3000cc used hybrid costs $20,000 to $40,000. Exempting these high duty vehicles from duty would be criminal. It will promote foreign interest.
Engineering Development Board is a government body mandated to look after the interest of the engineering sector of the country. It should not have called for such an opinion.
The most prudent way to facilitate overseas Pakistanis would have been to offer them to buy any Pakistan made car in foreign exchange and get a discount of 30 percent on government duties. It may be mentioned that the average government levies on local produced cars are over 35 percent of their sales value.
This facility would mean that the overseas Pakistanis would get Rs175,000 discount on the purchase of a Rs1.5 million car, and Rs350,000 on purchase of a car worth Rs3 million. Thousands of overseas Pakistanis would avail this duty and the country would earn valuable foreign exchange.
An interesting observation has been made by the federal minister of environment that replacing conventional cars with electric vehicles would save $2 billion worth of imported fuel. The minister perhaps failed to calculate the cost of this replacement.
There are around 3 million cars plying on our roads. To replace only 100,000 cars with used electric cars would cost at least $3 billion, and to replace 3 million cars we would need $90 billion. Is it worth saving $2 billion per year by spending such a high amount?
The environment minister must know that as of December 2018, there were about 5.3 million
light-duty all-electric and plug-in hybrid vehicles in use around the world.
Despite the rapid growth experienced, the global stock of plug-in electric cars represented just about 1 out of every 250 vehicles (or 0.40 percent) on the world’s roads by the end of 2018.
The environment minister should instead work to address the inefficient use of power and energy by industries in Pakistan.
The government should encourage overseas Pakistanis to bring in new technologies by offering
them free and prompt installation of power and gas at plots earmarked for them in all industrial estates.
They should be facilitated by offering them discount in tax rate on each hiring of 10 skilled persons and things like that. We need clean technologies as current technologies are spreading more pollution than the vehicles plying on our roads.
The smoke emitting vehicles should be immediately impounded through better governance.
