RECORDER REPORT

LAHORE: The Pakistan auto sector has expressed shock over the Prime Minister's decision to dissolve the Engineering Development Board (EDB) at a time when Pakistan stands to benefit from work the board has been doing for last 22 years.

The Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), leading organizations of the sector, have also shed concerns over the hasty decision of the government regarding EDB.

Sources in PAAPAM said that the dissolution of the EDB can sidetrack manufacturing in this country which has progressively made great strides in bringing new methods and technology to Pakistan. They said the EDB was the only institution looking at the wellbeing of the entire engineering sector, whereas industries like textile have an entire ministry dedicated to them.

The sources in PAAPAM also stated that the claims made by the government in PAAPAM's opinion, have no basis in reality. They stated that in PAAPAM's extensive interactions with the EDB over the last 22 years, PAAPAM has always found the board to be managed by professionals and educated people who put industrial concerns as top priority.

They added that for the future of the auto sector the EDB's role is of paramount importance, particularly as many new entrants now seek the Pakistani market. "PAAPAM only seeks to ensure the continued development of the engineering goods sector in Pakistan. We believe that we should support all government bodies and boards that selflessly strive to work in the best interest of the nation," the sources added.

They also said that the government's claim is unjustified that the EDB 'serves no useful purpose'. They said the EDB is the only platform that helped the industry grow and develop long-term vision for the development of the engineering sector, formulated and coordinated all government policies relating to the engineering sector, develop and overall strategic plan, promoted export, resolved appeal for grievances and managed deletion policy.

It is pertinent to mention that when the EDB was formed in 1995, hardly 10 to 15% of parts for passenger cars were produced locally. Today this figure has touched 70%. Similar trends were witnessed in case of motorcycles, trucks, buses and tractors. The industry was able to achieve these milestones only due to diligent implementation of deletion programs and tariff-based systems by the EDB.

The big support of EDB was to ensure that policy decisions were made with input from all affected parties. Consensus of all stakeholders made implementation of policy useful and its expertise of regulation and technical evolution of CKD imports and verification of pre-requisites for claiming concession allowed under ADP made ensuring compliance by companies to the rules set by the government much easier.

They also pointed out that EDB operations were severely affected as the government for over three years did not appoint the CEO.

It also has no foundation that EDB failed to show performance for promotion of auto sector. The aggressive localization that is now becoming the norm in the Pakistani automotive industry owes its existence to the hard work of the EDB. Import substitution now saves the country over 3 billion dollars annually. Current export of about 200 million dollars can easily hit five times that if continued support for the engineering industry is in place, added the sources. Moreover, it also shielded industry against the unfavorable conditions in FTAs and allowed a market and vendor base to develop to make manufacturing in Pakistan an attractive prospect for new entrants.

Today's industry growth is the testimony that EDB played its due role to facilitate ease of doing business. New players including Hyundai, Kia Motors, Volkswagen, Isuzu, Nissan, Renault etc are coming in the country, thus enhancing the market and competition.