Businessmen have own method to calculate losses from violence

They calculate losses by obtaining percentage attendance of employees during riots in the city.

KARACHI: Businessmen and industrialists of Pakistan have developed their own methods to calculate losses suffered by the country following any bout of violence, said Korangi Association of Trade and Industry (KATI) Chairman Razzak Hashim Paracha while speaking to The Express Tribune, adding that although the methods might not be exact, they are fairly accurate.

After the recent spate of violence in Karachi last month, industrialists and businessmen of the city announced losses worth Rs12 billion over a period of three days. In a country where no proper mechanisms exist to calculate most primary data, how do businessmen reach such figures accurately and promptly?

“We have a predefined pool of industries to survey. We call up these industries and ask them the percentage attendance of their employees during riots in the city and their production output for that day,” Paracha informed.

“We derive an aggregate average using their answers that informs us about the situation. The calculation is not 100 per cent accurate of course but it is a fairly good estimation. Our own averages combined with other industrial estates’ numbers help to estimate losses when the condition of the city is sensitive,” he added.

Paracha said that there was also a second method to estimate such losses.

“We calculate how many industries we have,” he explained. Presently, KATI has over 4,500 units, a number they have confirmed with the KESC by asking them for the number of consumers they have from the zone.

Once the number of industrial units is known, KATI members calculate the approximate daily production levels of all these units by collecting relevant information. This is a data set that KATI retains in its records for various references for a period of five years, following which a new survey is conducted.

“So when the losses for the city need to be estimated or when units go on a strike or close down, we have primary information about these units in our records and all we need to discover is how much production and consequently, taxation revenue for the government, has been lost for the day. We then announce the figures,” he stated.

Energy conservation and development

When asked what part KATI, as an industrial zone, was playing in conserving energy, Paracha replied, “When I took over, I started a drive where we concentrated not just on conserving energy but also on adopting means of production that consume less energy to begin with. We refer to it as a cleaner production method.”

“Furthermore, there is an NGO that we have signed up that will teach our members about conserving energy,” he added.

He added that although the response has not been overwhelming, it has not been poor either. The problem is that the industrialists are so involved in their daily businesses, that they do not have time to make things better for the economy and the country at large, he stated.

When asked about how the zone had utilised the Rs250 million development grant bestowed by the previous government on the Korangi Industrial and Trading Estate, an off-shoot of KATI, Paracha said that there were three major and one minor active projects.

“We are installing streetlights in Korangi, we are rehabilitating the EBM causeway, which serves as an alternative route to Korangi from the present bridge near Qayyumabad and we are developing several new link roads to the main roads. We are also working on industrial waste management and building garbage transfer stations,” he said.

Flood will not affect economic cycle

Paracha said that although the economy has been dealt a severe blow due to the floods, the economic cycle will go on and the economy will continue to grow. “The only difference is that the shape of the economy’s growth will change,” he said.

“During the reconstruction and rehabilitation period, you need cement, steel, etcetera and thus the construction industry is going to flourish. Moreover, the aid that is going to the victims may be free for them, but someone is buying it to send across, so that money is there,” said Paracha.

“Also, these victims are not going to be supported all their lives and eventually goods may be sold to them at a discounted rate or they will have to buy the goods themselves and as a result, that market will continue to exist,” he further explained.

As a businessman, he admitted a lack of trust between the government and the businessmen and called for a transformation in attitude. Unless one comes out of the pessimistic environment, nothing can be changed, he concluded.

Published in The Express Tribune, September 5^th, 2010.