Pak businessmen fear opening trade with India

Thursday, 22 April 2004, 07:00 Hrs
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ISLAMABAD: A large number of Pakistani businessmen have urged the government not to open up trade with India, saying such a move could ring the death knell for small and medium entrepreneurs.

"There is a strong need to change the mindset of the country's economic managers...we will be the losers if trade with India is opened," said Pervaiz Hanif, vice-president of the Lahore Chamber of Commerce and Industry.

Hanif differed with State Bank of Pakistan (SBP) governor Ishrat Hussain's assertion that opening up trade with India would provide Pakistani entrepreneurs access to a huge market.

Hussain, addressing a seminar here, had said opening up trade with India would be an opportunity for Pakistani business, giving it access to a market of one billion consumers.

"Before asking for opening up of trade with India, these economic managers should make public results of opening up of trade with a larger consumer base in China," Hanif told IANS.

He said as a result of Chinese goods flooding Pakistan, over 60 percent of manufacturers of non-traditional goods had closed down.

However, there was nobody to mourn their closure as a majority of them fell in the non-registered sector and small and "medium enterprises were running these industries, having no say in the corridors of power".

Hanif said India was a more inward and biased market compared to China, and Pakistani exporters would have to face a hostile attitude from their consumer base, especially when both countries were producing the same products and competing against each other at the international level.

He said the Chinese government offered heavy subsidies by giving free electricity for industries manufacturing exportable goods. It also provided free hot water to make steam from government owned mega-sized boilers.

In a majority of remote industrial estates in China, labour worked on a barter basis, receiving payment not in cash but in kind. This cut labour costs to drastically low levels.

Hanif said these three factors alone made up 28 percent of the input cost of any of the manufacturing units, not to talk of capital costs. Financing was also provided on subsidised or a zero percent interest rate to exporters.

The government had made no preparations to meet the challenges of WTO and the South Asian Free Trade Area (SAFTA) agreement. Opening the doors to Indian products was bound to ruin domestic industry, he asserted.




Source: IANS
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