December 13, 2006	Wednesday	Ziqa'ad 21, 1427

KARACHI, Dec 12: The Ministry of Commerce (MoC) has blamed short-sightedness and immaturity of the business community for their current woes.

“The community in their quest for easy short-term gains, compromises on their long-term interests,” said a spokesman for the ministry, adding had the entrepreneurs and traders read the signals being given by the government and restructured their businesses accordingly, they could have fared better.

“Over the last three years, the government announced several policies for them to gear up for future, but they failed to respond in a befitting manner. These policies were focussed on issues relating to competitiveness and high cost of doing business,” the spokesman told Dawn on telephone from Islamabad.

Since most of these issues, he said, were directly related with the ministry, their solution and necessary support were announced in the trade policies of the last three years to pre-empt such a situation.

However, unfortunately the trade and industry, particularly the export sector, failed to take advantage of these policies.

Citing an example, he said two years back the trade policy announced a Long-Term Financing (LTF) facility at the rate of 6.5 per cent for all sorts of investments, including capital goods. However, the industry, instead of taking benefit form this scheme, preferred raising funds for their long-and-short-term financing at normal mark-up rates which at that time stood as low as four per cent.

However, when mark-up rates jumped to 13 to 14 per cent, the industry created rumpus. The government accommodated their request and allowed them to swap their loans from high rate of mark-up to LTF scheme which even now charges mark-up at a rate of 6.5 per cent only. Instead of being appreciative of the support, the export sector was still complaining.

He said it seems that business class in Pakistan lacks vision and continues to be bogged down by petty issues, working on day-to-day strategy.

Similarly, he said the ministry last year allowed a six per cent Research and Development (R&D) support for garment industry which has now been adopted by the ministry of textile by allowing five per cent R&D for home textiles and three per cent for fabrics (non-bleached).

Last year, a new scheme for opening up of retail outlets by exporters was also announced in the trade policy. None of the export houses responded probably for they did not grasped the idea or spirit of the scheme.

Giving some details, the spokesman said that under this scheme exporters-cum-manufacturers were to get $30,000 state support in the first year for opening up of their overseas retail outlets, $20,000 in second year and $15,000 support in third year. This was to encourage the export trade to go into retail business in foreign markets.

The ministry entered into Free Trade Agreements with different countries to get tariff benefits for export trade. With Sri Lanka and China, FTAs have been signed and presently negotiations are under way with Malaysia, Thailand and some other countries.Furthermore, the spokesman said talks on Industrial Reconstruction Zones with the US are in advanced stage and they would allow duty-free export of products from these zones. All such steps were being taken to facilitate and support export trade, but the trade and industry did not avail these facilities as well.

The ministry also launched a scheme to promote brand names and assured the industry of full financial support if they develop their own brands rather than depending on their buyers’ brands. This would have also given them better returns and helped them establish in the world market.