ISLAMABAD, Jan 29: Banks’ reluctance to lend to the local industry because of lacklustre economic activities and growing violence have led to closure of 75 per cent industrial units and massive layoffs in the NWFP.

“There are about 2,500 industrial units in the province and only 594 of these are functional,” Sarhad Chamber of Commerce and Industry president Sharafat Ali Mubarak told Dawn after a meeting with Adviser to Prime Minister on Finance Shaukat Tarin here on Thursday.

It was a follow up to the meeting chamber’s members had held with President Asif Ali Zardari.

They urged the president to declare the NWFP a “war-affected province” and announce a package to revive its economy and avoid layoffs.

Mr Mubarak said that local and foreign banks were reluctant to provide credit facilities to businessmen in the province, but their branches in Kabul were lending massively to businessmen there.

He said the province had turned into a battlefield after the 9/11 incident and its infrastructure had been destroyed.

He said the province’s business community was facing severe liquidity problems because of the military operation and violence in tribal areas and a large number of factories had been closed. “The government is reluctant to come up with a bailout package to save the industry.”

He said that businessmen and traders, despite all odds, were regularly paying their taxes and because of this the regional tax office in Peshawar had met the revenue collection target for the first half of the current fiscal year.

Mr Tarin assured the SCCI delegation that the government would soon announce a special industrial package for violence-affected areas of the province. Under the package, the proposed reconstruction opportunity zones for Fata will be expanded to the entire province, he added.

The delegation urged the government to utilise foreign non-military assistance for developing industry in the province.

The adviser said that in order to boost exports to Afghan-

istan and minimise refund claims, the tariff structure for finished products would be modified and exports from export processing zones would be encouraged by providing security and infrastructure-related support.

Mr Tarin said the government was currently working on establishing a National Business Council comprising 40 entrepreneurs.