Govt’s claim of Rs800bn loss contested

ZAHEER ABBASI, SOHAIL SARFRAZ & TAHIR AMIN

ISLAMABAD: The government’s claim of Rs 500-800 billion loss due to ongoing sit-ins by Pakistan Tehreek-e-Insaf (PTI) and Pakistan Awami Tehreek has been challenged by economists, business community.

Former Finance Minister Selman Shah said here Saturday that so far the ongoing sit-ins have not inflicted any major loss to the economy because these are being held in the federal capital where there are no production units. However, he added that if these protests expand to other major cities like Faisalabad, Lahore and Karachi, the loss may be significant. Shah added that Finance Minister as well as other federal ministers claim of Rs 500 to Rs 800 billion losses to the economy on account of exchange rate and stock market is a loss on paper alone and is not real.

Finance Minister stated two weeks ago that the economy suffered Rs 500 billion loss including Rs 350 billion loss in the Stock Exchange due to the tense political situation and sit-ins by PTI and PAT. He also stated that the International Monetary Fund (IMF) team had cancelled its visit to Pakistan due to the prevailing political situation. However the fourth quarterly review with the Fund was in Dubai due to security concerns as well.

Minister for Commerce Khurram Dastgir issued a statement claiming that the loss to the economy has risen to Rs 800 billion.

Sources stated that a small component of revenue comes from units located in the jurisdiction of the federal capital; and the major chunk of revenue collection comes from the country’s business hub, ie, Karachi followed by Lahore and other cities. Islamabad is not a major contributor to the overall revenue collection of the FBR. The on-going sit-ins on Constitution Avenue and the civil disobedience campaign by the PTI have therefore had no significant negative impact on revenue collection.

They further stated that the FBR has provisionally collected over Rs 181 billion during August against assigned monthly revenue collection target of Rs 180 billion, reflecting an increase of Rs 1 billion. The revenue collection figures would further increase on compilation of final figures for the last August weekend in the coming days.

An Islamabad-based exporter maintained that he was unable to timely book orders due to blockage of roads as it was difficult to reach the dry port in the presence of containers blocking roads from one end of Islamabad to another. And if while sitting in Islamabad an exporter is unable to timely carry out banking transactions due to roads blockage, it would further delay booking of buying and selling orders.

President Rawalpindi Chamber of Commerce and Industry (RCCI) Shomail Daud told Business Recorder however stated that the ongoing political situation has caused billions of rupees loss to the economy; however, he did not quantify the amount. He said that the situation created uncertainty and disturbance in the market and consequently import of raw material and exports have been affected. He said that the depreciation of exchange rate against the dollar is going to increase the cost of raw material and may fuel inflation.

Chairman Pakistan Apparel Forum Javed Bilwani said that although there was no immediate impact on exports yet it may have long term impact as all the scheduled meetings with foreign business partners have been postponed. The ongoing exports of the country were ordered about 3-4 months ago and exports are on schedule, said Bilwani, adding that exporters are facing problems in getting new orders which may affect exports in coming months. Senior vice president Federation of Pakistan Chambers of Commerce and Industry said that the country has a total of $25 billion exports annually and due to the ongoing political situation exports may suffer. It takes a long time to get a client and we may well lose our clients who would place orders with our foreign competitors.