mood-of-the-moment

Smuggling menace

By: Editorial Team
Published: January 16, 2017
Print This Post

The de-industrialisation in Khyber Pakhtunkhwa is now a bitter reality. The industrial sector and traders are also worried because of the impact of the CPEC and the influx of Chinese goods. Many are planning to sell out their businesses, disinvest and move to other places

According to a recent provincial government report, Reclaiming Prosperity in Khyber Pakhtunkhwa 2015/18, “over the past years, 1,145 industrial units (62 percent) have closed down in the province, making thousands of workers jobless and increasing social evils like smuggling.” This means that billions of rupees’ worth of investment has been sunk or remains stuck.

There has been a broad-based decline in the production of the manufacturing sector. The poor law and order situation and the energy crisis are to be blamed for this state of affairs. So far no measures have been taken by the federal or the Khyber Pakhtunkhwa governments to counter this trend and give incentives to traders, business people and industrialists to boost the provincial economy. Rather than giving incentives, the KP government has imposed a one percent infrastructure development cess on all imports and exports, pushing the business community further against the wall.

About 145 plastic pipe manufacturing units, 45 printing units, six juice producing units and many small-scale sweet and toffee units have relocated to different parts of Afghanistan because of the imposition of the 25 percent customs duty on Pakistani goods by the Afghan government. The KP Chamber has taken up the matter numerous times both with the provincial and federal governments as well as with the Afghan government. But so far, these efforts have not yielded results. It seems that no one is serious about these issues, but the apathy of the Pakistani government is appalling. The federal government has not facilitated businessmen belonging to the smaller provinces and appears in no mood to change its course.

The de-industrialisation in Khyber Pakhtunkhwa is now a bitter reality. The industrial sector and are also worried because of the impact of the CPEC and the influx of Chinese goods. Many are planning to sell out their businesses, disinvest and move to other places.

The illegal business activities of the Afghans, coupled with smuggling through the porous Pak-Afghan border, has also hurt KP’s economy badly. But successive governments have yet to take up the issue or tried to address it. Rather than taking measures to counter smuggling, the Federal Finance Ministry keeps on increasing the customs duty and valuation on imports, which encourages smuggling. The imports through the Sust (Pak-China) border is also badly hurting the economy.

The blame rests more with the federal government since policies are made by Islamabad and not the provincial government. The rulers are more worried about their personal wealth and business interests rather than the country’s economy.

Showing growth in the budgetary figures is merely cheating the public as the country’s key economic indicators, including exports, are declining. Khyber Pakhtunkhwa’s precious gemstone sector has come to a grinding halt in terms of the export of unfinished stones. The government is showing increased revenues in customs dutieThe PML-N is traditionally very harsh on Khyber Pakhtunkhwa businesses. The tax incentives given to the Gadoon Industrial Estate by the Pakistan Peoples Party government in 1988 were immediately withdrawn by Nawaz Sharif when he became prime minister in 1990. Gadoon is now a graveyard of our dead industriess, sales and other taxes, which in reality is due to the increase in valuation by the Customs Department on imports and devaluation of the Pakistani rupee.

About the Author
Editorial Team
The Editorial team of Bol Narratives