The ongoing political tussle in Punjab has placed a huge burden on the country’s economy. The business community has already put a figure on it: Rs1 billion has been lost following a sharp reduction in economic activities after the Eid holidays.
For over a week now, the rising political temperature has triggered grave economic losses and steps taken by the Punjab government have added fuel to the fire. The decision to curb the protests through barricades and roadblocks has stalled trading activities across the country.
Businessmen say that no one is prepared to send shipping containers to Punjab. Furthermore, some consignments that were en route to different markets in Punjab have been seized, causing a shortage of essential commodities. According to the Heavy Transport Association, around 1,200 containers were seized by the police and administration. The daily rent of each container has been estimated to Rs10,000. As a result, the transporters are bearing losses of Rs12 million every day.
Exporters – especially textile millers –are experiencing daily losses of exports worth $30 million. Moreover, the Karachi Stock Exchange has fallen by 1808 points after Eid. According to one expert, this has resulted in an estimated loss of Rs36,160 million.
Lahore is the epicentre of the movement. Nearly all the entry and exit points to the city have been blocked. Over the last couple of days, the wholesale markets in Lahore have produced very low business. The risk of political turmoil, road blockages and the absence of transport facilities have compelled them to stay away from Lahore.
Challenges and solutions
“While we are in the twenty-first century, we don’t seem to have institutions that can help us cope with the challenges of a new era. Political stability is important for economic growth. However, our institutions need to be stronger enough to ensure minimal disruption to political crises,” former finance minister Dr Salman Shah told The Express Tribune. He added that the current situation has developed due to reforms initiated during the Musharraf era and the matter should be addressed in a manner that causes minimal damage to the system.
Interestingly, there are different estimates of the losses.
According to Sohail Lashari – president of the Lahore Chamber of Commerce and Industries – the economy in general is bearing a daily loss of around $71.3 million or $500 million a week.
“We are fed up of the current situation as it has reduced the scope for business activities,” Lashari said. He claims that the international business community has cancelled its ventures in Pakistan –a huge setback for e country’s economy.
“Our estimates reveal that the daily losses which Lahore is bearing these days is approximately Rs3 billion,” said Ashraf Bhatti, president Anjum-e-Tajran Pakistan. He added that the markets are deserted and it has become difficult to meet daily expenses. Furthermore, Ashraf Bhatti expressed his doubts over whether traders and the business community will be compensated.
Published in The Express Tribune, August 15th,2014.