A steady decline

[Lahore_Real_Estate]

There are two indicators of decline that we cannot ignore. Both are verifiable and neither is open to challenge. Firstly there is declining confidence in the National Savings Scheme which has seen a reduction of Rs42.45 billion in investments, and withdrawals are now exceeding deposits. Over Rs32.35 billion was taken out of the Defence Savings Certificate scheme in October 2009 and in 2009-10 Rs64.11 billion was withdrawn. The reasons for the slide in confidence are said to be a lack of public confidence, corruption and bribery and the effects of a steady increase in inflation. We need to get people to save more – but persuading them to do so in the current climate is extremely difficult.

The second indicator is the industrial state of the nation. The Karachi Chamber of Commerce and Industry (KCCI) is the largest chamber of its kind in the country having over 17,000 members. It has issued a report that spells out the problem in detail. The reason for decline in the industrial and business sector is the same as the decline in the financial sector. The energy crisis, a culture of extortion that is everywhere, and the increased costs of production which are currently leading to the closure of at least one industrial unit in the city every day. An average of 316 industrial units has closed every year for several years, and the average number closed per month is 26. The number of people made jobless with every closure averages at 500 – which means job losses of 13,000 per month and a staggering 156,000 per year. The source for the figures is none other than the Ministry of Industries and Production, which may be expected to underplay bad news so these figures could be lower than the actual incidence of closures and job losses. The chairman of the KCCI used the textile industry as an example of the problem. Textiles have been our export mainstay since partition and until recently the banks were offering up to 70 per cent financing to the sector – now reduced to 25 per cent or less. There is no quick fix for any of this. It took many years to get into this mess and it will take many years to get out of it, and get out of it we must if we are to survive. Quality political will coupled with energetic leadership would help, but we seem as far from either as we ever were.