29 May 2004	Saturday	09 Rabi-us-Saani 1425

KARACHI, May 28: Korangi Association of Trade Industry (KATI) Advisory Board chairman Shaikh Manzar Alam has lamented that despite big economic achievements, there has been no change in the suffering of common man.

"Increasing poverty in Pakistan is the direct result of indirect taxation. Tax collecting agencies at the federal and provincial levels only know how to squeeze the common man by enhancing the rates of utilities. The increase in rates of electricity, gas, telephone and petrol/ petroleum products is causing price spirals in essential items," he said in KATI's budget proposals for 2004-05.

He informed the government that the common man is left with no option but to cut his expenses as much as he possibly can. "First of all, the education of children is sacrificed. These children are forced to look for non-existent jobs, aggravating the unemployment situation," he added.

"Time has come that the government should focus on supply side economics in the next budget by adopting liberal import policy and removing duties on industrial raw materials and capital goods. This policy will help generate employment and boost exports," he said.

At present the country is confronted with chronic problem of unemployment and resultant poverty, which is the root cause of crimes. He urged the government to take all possible steps in promoting SMEs.

On smuggling, he quoted an Asian Development Bank report that revealed that nearly 90 per cent of Afghanistan's $1.2-billion exports and about 46 per cent of its $600-million imports were routed through Pakistan. A large percentage of goods that passes through Pakistan under the Afghan Transit Trade find their way back into Pakistan through smuggling.

In order to discourage smuggling, all that the government has done, is to put a number of items imported under the ATT on a negative list from time to time. According to the ADB report, ineffective government policies and rampant corruption in customs' lower ranks staff were responsible for these smuggling operations, he said.

The government must provide risk guarantees to big investors and the undertaking that economic policies would not be changed for a reasonable period of five to 10 years in order to attract foreign investment.