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‘$200 million exports loss due to political unrest’ - LRE - 07-19-2008 05:45 PM
‘$200 million exports loss due to political unrest’
ISLAMABAD: The country faced export revenue loss of $200 million in the five days disturbances followed by martyrdom of Mohtarma Benazir Bhutto on December 27, 2007. Commerce Minster, Ahmed Mukhtar, said while announcing Trade Policy 2008-09 that tragic event had cast a long and dark shadow on the economic and political health of the country.
He said that Pakistan Peoples Party (PPP) led government had inherited a very difficult economic situation. The country faced difficult issues on external front including the doubling of international oil prices from around $68 per barrel to $145 per barrel during the last financial year. The slow down in the US economy and turmoil in the international financial markets reduced external demand for exports and on the internal front the last year was of constant political instability sparked off by the judicial crisis in March 2007.
The law and order situation also assumed dangerous proportions in the form of the Lal Masjid affair, the increase in frequency and lethality of terrorist bomb blasts and of course the state of militancy and insurgency in FATA and the NWFP. The saddest occurrence in this regard was the other challenges on the internal front that made it difficult for exporters to fulfill their export orders on time and at a competitive price during the year included.
In this regard power shortages and resultant load shedding of electricity and natural gas, impact of monetary and exchange rate policies, plus supply side constraints, rising costs of salary bills and raw material, particularly raw cotton, increasing competition in export markets and travel advisories of foreign governments discouraged importers to continue sourcing from Pakistan. Long term structural issues such as labour skills deficiency and poor infrastructure was also the issue. As a result of these multiple negative factors economic growth rate dropped to 5.8 percent as compared to 6.8 percent last year and that slow down was particularly evident in the commodity producing sectors such as agriculture and manufacturing with serious implications for exports.
Agriculture grew by only 1.5 percent as against 3.7 percent last year and in the two major crops i.e. cotton and wheat there was a negative growth of 9.3 percent and 6.6 percent respectively. The manufacturing sector also saw the weakest growth in a decade, since overall it grew by 5.4 percent as compared to 8.1 percent last year. Large scale manufacturing was even more dismal since it registered a growth of only 4.8 percent as compared to 8.6 percent last year. zafar bhutta
http://www.dailytimes.com.pk/default.asp?page=2008%5C07%5C19%5Cstory_19-7-2008_pg5_17