Industry running to full capacity: Razak

ISLAMABAD: Pakistan’s industry is now running close to its 100 percent capacity and more importantly the process to expand the industrial base has kick started which is quite visible by increasing imports of machinery. This means that country which was two years ago on the mode of de-industrialization is now on way to industrialization, claimed Adbul Razak Dawood, Adviser to PM on Commerce and Investment.

The country’s curve of industrial activities after momentum in the wake of the government’s incentives has hit a plateau but will further go up after expansion of the existing industrial base. The government has provided Rs100 billion worth TERF (temporary economic refinance facility) to the business community for import of machinery to achieve sustainable industrialization. And in a welcoming development, many industrialists have started importing machinery under that initiative. Under the said facility, the liquidity to the business community is available at 5 percent interest rate. The industrialists can avail TERF initiative till March 31, 2021, Dawood said.

Adbul Razak Dawood, Adviser to PM on Commerce and Investment told this to The News in an exclusive talk here on Wednesday. He said that export to China after FTA-phase II has jacked up by 30 percent in November despite the adverse ramifications of COVID-19. And more importantly, exports in services have also increased by 46 percent in five months of the current financial year. The exports to USA, UK and Australia have soared by 16 percent each in the first five months and to Korea by 15 percent. The exports to ASEAN courtiers and Africa are also on the rise.

However, Dawood said that because of the disastrous decline in cotton production Pakistan’s industrialists will have to import five million cotton bales worth $1.2 billion to meet the textile export orders. This year the cotton production has alarmingly gone down to 7 million bales from 14 million bales which cannot cater to the requirement of the textile industry. Now Prime Minister Imran Khan has geared up special efforts to focus on increasing the cotton yield next time and the government is on its toes to regain the target of 14 million cotton bales so that the maximum potential of the textile sector could be exploited. He said after the 18th Amendment the required emphasis to the agriculture sector was not given. The farmers’ community is sick of the low quality seeds and pesticides causing the low productivity. ‘Now the government will step up its efforts to ensure provision of quality seeds and pesticides to enhance the crop yields.”

Dawood said diversification in textile exports has gained momentum because of the massive value addition taking place. To encourage the value added products for textile exports, the government will continue to provide the incentives in the shape of DLTL (drawbacks of local taxes and levies). However, the facility will not be available for export of yarn and grey cloth. He said that the government has trimmed 10 percent duty on import of yarn to 5 percent by doing away with the 5 percent regulatory duty. However, 5 percent custom duty on import of yarn will continue to be there.

When his attention was drawn towards the second wave of COVID-19 and reports about complete lock downs in various cities of EU, US and UK and the worst ever decline in Christmas sales in the last 50 years and its ramifications on imports from Pakistan, the SAPM said that no doubt that deadliest wave of COVID-19 has contracted the world economies particularly those in Europe and USA, but there is no negative indication from any buyer country to cancel, postpone or put on hold the export orders from Pakistan. He claimed Pakistan already has booked export orders even for months beyond Christmas in US and Europe.