Thousands losing jobs as businesses going down

ISLAMABAD: Prime Minister Imran Khan has been told that private businesses are on fast track of decline causing huge unemployment throughout the country, thus, seriously denting the country’s economy.

Informed sources close to the prime minister said that Khan has also been advised to announce some sort of amnesty scheme to allow the business community of the country to realign themselves and their businesses in view of the “corrections” being made by the regime.

The prime minister, it is said, has also been warned that the market is almost closed and if the confidence of the business community is not revived, there will be huge unemployment in six months’ time. These sources said that because of its political opponents, the PTI government should not create a situation where politics start hurting business and trade in the country.

The prime minister, according to these sources, is also concerned about the present situation and for the same reason is insisting upon creating a business friendly environment, which is critically important for job creation and employment opportunities.

A top economist, who also advises the prime minister on financial matters, confided to The News on condition of anonymity that Imran Khan is personally inclined to launch an amnesty scheme which instead of being revenue-focused should encourage businesses and investment for job creation and economy’s uplift.

The source said the government’s measures to check hundi and hawala, money laundering, fake accounts and corruption are the major “corrections” in our system but these are badly hitting the private businesses and causing huge unemployment. Without compromising on these “corrections” in the system, the source suggested, the government should allow the businessmen and investors here to readjust by offering amnesty.

A large number of people, associated with different professions, are losing jobs as even the government’s top-most priority area -- housing business from construction to real estate and private developers -- is the most hit during the four months of the PTI's tenure.

Tassaduq Husain, Executive Director of Pakistan’s top real estate marketing company Star Marketing, when approached told The News that the real estate, housing, private societies’ developers, builders and construction businesses are presently in extremely bad shape owing to which a large number of people have lost their jobs during the recent months.

He said that housing societies and builders have started massive retrenchment as their businesses are badly affected because of multiple reasons. These reasons, he said, include inconsistency in government’s policies, political situation, harassment by NAB and FBR, bureaucracy’s reluctance to sign files and take even legitimate decisions, rupee devaluation and high cost of construction.

Tassaduq disclosed that the situation is so bad that even the Star Marketing is facing difficulties in paying the salaries of its staff.

Pakistan Association of Automotive Parts and Accessories Manufacturers through a newspaper advertisement, which appeared on Monday, said that 1,200 jobs have already been lost in the automotive industry in the last three months. It warned if the situation continues, this very industry will lose a further 50,000 jobs soon.

Besides other reasons, the association advertisement referred to uncertain fiscal policies, increase in interest rates and cost of doing business, imposition of additional regulatory duty on raw material, restrictions on non-filers to buy new vehicles, etc, causing damage to the industry.

Despite the fact that the PTI government has been lucky enough to fetch considerable amount of assistance from its friends like Saudi Arabia, the UAE and China, still the business environment is not picking up, instead it is on decline.

According to the World Equity Index Ranking report, out of 20 worst performing stock markets of the world (in US dollar terms), Karachi SE 100 Index was the 15th worst during the period 29-12-2017 to 28-12-2018. According to a Dec 31 “Topline Market Alert” of Pakistani Brokerage House regarding Pakistan Market Performance Highlights for 2018, “Pakistan equities down 8 percent (decade’s worst performance of – 27 percent in US$) during 2018 and is amongst one of the worst performing markets in the world. Trade value fell 44 percent to six years low of US$65 million a day. KSE fell for 2 consecutive calendar years, after period of 22 years. Net foreign selling in stocks stood at record more than US$530 million.”

According to an expert, in terms of market’s own performance it is 8 percent down during the year in PKR but from international perspective, the devaluation of Pak rupee made it last but fifth worst performing market in the world.

It is explained that adjustments in the value of rupee to certain extent would have been good but from 105 to 139, over 32 percent, was an overkill. “While we needed to address the issue of exports, with no spare production capacity for exportable goods, it would have been good to diversify export base and add more items to conventional items like cotton, rice etc as well as giving exporters targeted incentive rather than massive devaluation,” the source said.

Like several other industries, the media industry in Pakistan is also facing a crisis-like situation because of declining advertisements both from public and private sectors. Thousands have already lost their jobs in the Pakistani media industry while there are a number of media outlets including some leading ones which are failing to pay the salaries of their employees.

It is said that real estate and telecom related advertisements have seen a major decline in the media, both print and electronic, besides the government’s decision not only to minimise its advertisements but have a downward massive revision of its ad rates.

When contacted by The News, the spokesman for the federal government on financial issues, Dr Farrukh Saleem, rejected the impression that the slowdown was being witnessed in the construction industry.

“There is an increase in cement sale this year, which belies the impression of slowdown in construction sector,” he said.

He said the textile sector -- the biggest employer with 0.5 million job capacity -- is being revived by the government. About 100 factories which were shut down during the tenure of previous government will re-open in the next three to six months.

The representatives of textile industry are happy with a subsidized price of $6.5 per unit LNG and they have promised to re-open their factories.

He said the automotive industry is witnessing global slowdown and in Pakistan increase in car prices have also resulted in decreased sale of cars this year.