KARACHI, April 11: The European Union and International Monetary Fund (IMF) have raised objection over higher tariff protection being enjoyed by Pakistan’s automobile assemblers, the Federal Commerce Minister, Humayun Akhtar Khan said at a dinner function of the Karachi Chamber of Commerce and Industry (KCCI) on Thursday evening.
“I will sit with the local assemblers and chalk out plans for the next five to seven years to meet the challenges emanating from scrapping of tariff protection,” Humayun said.
The government, he said, would lower tariff protection in such a way that automobile industry could not suffer any setback.
To a query by a KCCI member that the local assemblers are fleecing the consumers by creating artificial shortage in the market, he said that situation would come under control as assemblers had already started double-shift production to meet the rising demand.
He said the gap between demand and supply usually comes particularly when some new models arrive in the market.
He, however, ruled out any government’s future plan to allow import of used cars as any decision in this regard will play havoc with the huge investment and jobs of thousands of people.
“I am not defending the auto assemblers but the government cannot liberalize used car import as the auto industry has shown growth in the last 20 years,” the minister said.
He said the government has been pressuring the car makers to decrease prices and increase production capacity.
The chairman, All Pakistan Motor Dealers Association (APMDA), H. M. Shahzad informed the minister that the new locally assembled cars were still selling on premium rates. He said that the Toyota cars, petrol and diesel, were selling at premium rates of Rs125,000 and Rs150,000 while Honda Civic and City at Rs80,000 and Rs50,000 respectively. Dealers are charging Rs40,000 each for Daihatsu Cuore and Suzuki Mehran while the black market price for Hyundai Santro is Rs42,000.
On other areas, Humayun Akhtar said the government would announce an export-led growth package in the next few weeks. “We had planned to announce in March but it got delayed as the government wanted to provide complete security for its proper implementation,” Humayun said adding that Prime Minister Mir Zafarullah Khan Jamali would announce the export package.
The government, he said, had also planned to hold a conference in Karachi in which all the stake holders, export houses, businessmen and industrialists would be invited to discuss ways and means to find new export destinations as well as boosting exports to Far Eastern Markets. He said the Prime Minister would be invited in the conference scheduled to be held by end of May.
He said the government had also planned to form an Exhibition Authority which would be represented by all the stakeholders of the business community. “We plan to organize one major international exhibition in Pakistan of global repute every year, covering all the sectors instead of too many exhibitions,” he said adding that Pakistani embassies had already been reactivated to achieve the objective.
He admitted that disbursement of sales tax refunds was slow but said that actually small and medium sized exporters were the victims instead of big exporters who used their clout to get quicker refunds.
He said that capacity utilization in many industries have started showing signs of improvement. As a result, export during July-March 2002-2003 went up by 20 per cent while in March alone export surged by 30 per cent. He attributed the rise in exports to BMR of $1.4 billion in textile sector and EU concessions which also improved productivity. “We now hope to cross the $10.4 billion export target in the current fiscal despite Iraq war jitters,” he added.
On subsidies, he said the US and Japan were giving 100 per cent subsidies on their agriculture products so that their products could sell at lower rates and compete in world markets. On the other hand, IMF and World Bank were not allowing Pakistan to give subsidies. However, under the WTO, the government can give subsidy.
On anti-dumping duties, he said the National Tariff Commission (NTC) has been restructured and its corporate building is under way. After imposing anti-dumping duties on South Africa, a number of other investigations were going on.
Earlier, president KCCI, Mian Nasser Hyatt Magoo also spoke on the occasion.
