KARACHI, Aug 10: Textile operators in Pakistan will be able to get loans from the banks on strength of their balance sheets for import of reconditioned machinery and equipment from North and South Carolina in the US where about 200 textile mills are about to be closed.

Federal Commerce and Industries Minister Abdul Razak Dawood informed business executives on Saturday that he has discussed the issue of possibility of importing re-conditioned textile machinery and equipment from the US with the governor, State Bank.

“There is no problem to get funds from the banks on your financial strength for import of textile machinery from North and South Carolina,” he responded to Mirza Ikhtiar Baig of the Federation of Pakistan Chambers of Commerce and Industry who had complained that about 200 textile units in USA states are about to be closed and good quality machinery and equipment was available. “But banks have strong reservations,” he complained.

The minister advised the businessmen to consider the possibility of acquiring the control of company and purchase brand names while transacting business for textile machinery and equipment from the US.

“This will give you access to that company’s market share in the US and other countries,” he said.

The occasion was a seminar on “Trade Policy 2002-03” organized by the Management Association of Pakistan.

The federal commerce minister and Mirza Ikhtiar Baig were the two speakers. The third speaker was Chairman of the Export Promotion Bureau who did not turn up.

Responding to another question, the federal commerce minister remarked that a levy of 15 per cent sales tax on all drugs was not a correct policy and blamed IMF for forcing Pakistan to do so.

The government, he said, is now giving a hard look at the drug list and GST and is expected to rationalize.

He spelt out the objectives, philosophy, and direction of the 2002-03 trade policy which he said remains consistent so far as liberalization is concerned and a gradual reduction of government’s role in business is concerned.

He mentioned total deregulation of wheat and rice trade as an example of government’s consistency in direction of getting out of the business and assigning private sector main role in the trade.

“I want Pakistan to be a trading nation,” he remarked and expressed the desire to see “potatoes being exported from berth number 3 on Karachi port and imported from berth number 4.” There is no problem in opening all sort of import and export business for all the items and goods by the business. “Let the market forces decide what is feasible for import and export.”

But the minister showed strong reservations when it came to the issue of import of cars and second hand automobiles. A participant embarrassed the minister by asking why he does not want similar free trade for automobile. “I wish I could,” he replied and explained the capital intensive nature of the industry and that auto parts manufacturing has become a big size industry in Pakistan and needs protection.

He called pharmaceuticals, polyester, heavy engineering and food processing as the future industries of Pakistan for which the trade policies are the roadmap.

He advised the investors to “pick any industry which is not based on agricultural product” because as he explained agricultural based industries are vulnerable to water shortages.

Abdul Razak Dawood reminded the audience that Pakistan has been producing surplus potatoes and vegetables in last three years. He said that Pakistan’s agricultural products are of best quality “so long as they are on the plants. These goods get haywire when touched by the human hands,” he said while referring to the limitations of transport, utilities cost and handling of goods at the port.

Replying to a question he said that he wanted to bring an end to the office of Director Trade Organisations (DTO) who literally control the trade bodies. But many a businessman wants the government control on their organizations and did not support him.

Mirza Ikhtiar Baig said that the trade policy fell short of certain expectations of the businessmen. He said that export target of $10.4 billion was achievable provided the exchange value of rupee remained stable.

The Chairman of MAP Masoud Naqvi said that significance of 2002-03 trade policy is that it is the last announcement from the present government.