Sit-in and govt’s reaction will all take toll on economy

Using cargo-loaded containers will have drastic effects on exports, revenue and economic outlook

KARACHI: Pakistan’s economy is facing several issues already including, but not limited to, the burgeoning foreign debt, ever-rising unemployment, low lying exports, rising imports, slowdown in remittances, little spending on social sectors, rising cost of doing business and little foreign direct investment. There are many others as well.

These economic indicators are set to worsen if the planned dharna (sit-in) by Imran Khan and Tahirul Qadri in Islamabad goes ahead. The stock index, which is considered a barometer to gauge economic performance, has already been hit by political uncertainty in the country as they remained under stiff selling pressure throughout the previous week.



The developing political scenario; the government used force to stop protestors from reaching Islamabad and blockage of ways leading towards the capital with containers and cargo carriers clearly suggest worse is to come.

This is irrespective of who is right and who is wrong in domestic politics.

According to the Pakistan Bureau of Statistics, the country’s exports fell below $21 billion in the previous fiscal year ended June 30, 2016 from over $25 billion in fiscal year 2012.

The exports are going to take a toll with most likely cancellation of export orders in the days to come. Owners of trucks, who claim to move 95% import and export cargo nationwide, have threatened to go on strike from Monday (today) if their vehicles are not released by the Punjab government.

Lahore Goods Carriers Association General Secretary, Tariq Nabeel, said the government is using the cargo-loaded container-carrying vehicles to block ways leading towards Islamabad so that the November 2 planned sit-in by Pakistan Tehreek-e-Insaf (PTI) does not take place.

Pakistan Tanners Association Chairman Anjum Zafar has said most loaded containers carrying precious export cargo, including finished leather products, are held up on roads in various parts of the country especially in Lahore. They are unable to proceed to Karachi sea ports for embarkation on scheduled vessels in compliance with letters of credit already executed with foreign buyers and customers.

“This may also result in cancellation of export orders or imposition of heavy penalty for late execution ... this would ultimately be harmful for the country’s exports and national exchequer,” he said.

“Leather exports of Pakistan alone have declined by 21% in the fiscal year 2015-16,” he added.

Federation of Pakistan Chambers of Commerce & Industry Senior Vice President, Khalid Tawab recalled that in 2014 a large number of vehicles were detained for the same purpose which were then burnt, looted and damaged and the business community in general and the goods transporters in particular suffered heavy losses. He said that the same situation might happen again.



The likely loss of exports would ultimately result in higher imports to meet domestic needs. To do so, Pakistan may increase foreign debt, which has already reached an alarming level of around $74 billion as of today.

The poor economic situation is not only making it impossible to create fresh employment opportunities in the country, but is happening at a time when foreign workers are also facing pressure in other places. The slowdown in the growth of remittances, especially from oil-producing countries, is in large part hurting Pakistan as well. The current scenario may just worse an already fragile situation.

The writer is a staff correspondent

Published in The Express Tribune, October 29^th, 2016.

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