October 11, 2001	Thursday	Rajab 23, 1422

LAHORE, Oct 10: Fears of constant piling up of stocks at mills and a possible suspension of production as a consequence of the cancellation of export orders and the slowdown in shipment of cargo in the wake of unstable regional situation developed during last one month after the September 11 terrorist attacks in US are keeping businessmen of Punjab worried.

“Foreign buyers are not only reluctant to place fresh orders, they are also cancelling their previous orders because they don’t believe that we will be able to deliver the orders on time due to the ongoing war on Afghanistan,” said Pakistan Readymade Garments Manufacturers and Exporters Association chairman Pervez Hanif.

The Prgmea chief claims that many garment exporters have already cut down or suspended their production because of stockpiling and cancellation of orders.

The Export Promotion Bureau officials here also confirmed that the post-September 11 situation has left an adverse impact on the country’s international trade and industrial production.

“Yes, we are receiving reports of revocation of export orders, closure of production operations in the garments sector, and also the financial crunch faced by the exporters due to slow refund of their sales tax and duty drawback claims,” an EPB official said.

“Textiles, leather, and carpet are the areas affected the most due to the current situation,” she said. She said almost all the industrial sectors have been affected by the crisis.

Exporters say the biggest challenge confronting them is how to deliver their orders on time. The foreign airlines have suspended their operations while shipping lines are reluctant to lift goods from Pakistan and declared it as the war zone. It is resulting in piling up of stocks at the ports as well as at the mills.

“The only airline left operating here is PIA, which cannot meet needs of exporters,” Lahore Chamber of Commerce and Industry vice president Yawar Irfan said. “It is now for the PIA to enhance its capacity to airlift cargo,” he said.

The EPB official said there is huge backlog of cargo “piled up at the port in Karachi”. “The orders are being delayed, affecting our credibility,” she said.

The Prgmea chief said the financial impact of the present situation would be far more than $1.40 billion as worked out by the commerce minister if the war continues for a longer period. “Exports have virtually come to a halt because of uncertain regional situation and a poor country image of Pakistan in the US and Europe,” he said. Foreign buyers are calling off their scheduled visits to Pakistan because of the two major factors: “One, they have doubts about our ability to ensure timely delivery of orders due to the crisis. Secondly, the American and European consumers are not buying made in Pakistan goods as they consider us harbourers of terrorism,” he said.

The cancellation of personal visits by the foreign buyers will leave a long-term impact on the country’s exports, say exporters.

The LCCI vice-president said the government needs to undertake a “massive” exercise to improve the country’s perception in the United States and Europe. “Foreign buyers should be assured that ours is a safe country to travel. The shipping lines must be assured that we are not in the war zone. The foreign airlines need to be persuaded to restart their operations. Only by taking such steps, stocks could be prevented from piling up,” he said. He also stressed the need for instructing the banks to give up their reluctance in “opening new LCs and the insurance companies to withdraw the war risk levy.

The protests by religious parties in Balochistan, Peshawar and elsewhere against the US-led air strikes against Afghanistan, and the burning of the American flags are also scaring foreign buyers away.

“The burning of the US flags has left a negative impression on the western buyers and consumers. They are turning to China and other nations. They do not need to come to us in the present circumstances, if they can go elsewhere,” the Prgmea chief said.

The unstable situation developed in the region since September 11 raids is not only distressing for the exporters, it is equally worrying for the importers, who fear that the country may have to face shortage of industrial raw materials due to the delay caused in the scheduled shipment of imports by foreign shipping lines.

Mubashir Shaikh, a major Lahore-based importer of plastics and chemicals, said ships “are offloading cargo intended for Pakistan at Dubai.” He said his imports of chemicals had been delayed as a result of this new development. He said the shipping line, which was supposed to bring his goods from Saudia during this month had sent him a letter stating its inability to follow the schedule in the existing conditions. “The line has informed me that the delivery would be made some time next month,” Shaikh said.