It is welcome to note that the coalition- government has clamped down on those who smuggle essential commodities abroad in the country, initially imposing heavy fines and two-year imprisonment on those involved in the smuggling of wheat, flour, sugar and fertilizers.

In the high-level meeting held under the chairmanship of Prime Minister Shehbaz Sharif regarding the prevention of smuggling of the mentioned items, he warned that smuggling abroad is not acceptable in any way and the current economic situation of the country cannot afford it. Those who have caused billions of dollars of damage to the country will be punished.

The Prime Minister directed SPARCO to provide real-time satellite imagery of the country’s borders and traffic data, prompt operations, increase the number of check posts in the border districts of Khyber Pakhtunkhwa and Balochistan, take action against warehouses used for stockpiling and smuggling and issued instructions to immediately activate the anti-trafficking courts, to present the action plan for anti-trafficking within two days.

He also said that the sale of sugar and urea fertilizer seized during the operation should be ensured at official rates, and honest officers should be appointed at the international border.

A briefing was given by FBR, Ministry of Interior and law enforcement agencies in the meeting. It was informed in the meeting that 740 godowns have been identified with thousands of tonnes of sugar, urea seized and stockpiled in the border districts. According to FBR officials, a penalty equal to the total value of the smuggled item will be imposed under the Customs Act.

Strict measures by the Prime Minister to stop smuggling are imperative as it creates artificial scarcity of commodities, which increases inflation.

The main reason for this is the price difference.

Meanwhile, the focus on purchase of Russian oil is also welcome in the wake of unprecedented rise in prices of POL.

In the light of the successful negotiations with the Russian delegation in recent days, Pakistan has placed the first order for the purchase of crude oil under which its supply will start in May. Among the matters to be decided in these negotiations, the mode of payment is at the top. During the global pandemic of Corona, where the global recession took hold, after the situation could not be recovered, the Russian invasion of Ukraine in February 2022 had a severe impact on the mineral oil market. This has had the greatest impact on developing countries, as a result of which Pakistan has been suffering from an oil crisis since April last year. The country has also suffered from load shedding. A large part of scarce reserves of foreign exchange is being spent on the purchase of oil and gas, after which it fell to the lowest level in history and the acquisition of oil for the future is also in danger. However, after the encouraging progress at the diplomatic level, Russia has received a positive response to provide cheap oil and in January this year Russian delegation had a successful discussion with the Pakistani authorities.

At present, India is the largest importer of Russian oil in South Asia, while due to the different economic situation of Pakistan, the Russian authorities have shown flexibility in terms of payments including cheap oil.

Russia has a long-standing desire to increase the volume of bilateral trade with Pakistan, but the distance created in the past has not allowed it to materialize.

This experience of purchasing oil is of great importance in building mutual trust, in the light of which there is a strong possibility of progress on increasing the volume of bilateral trade.

Meanwhile, the Govt should also take note of the deteriorating state of the industrial sector. The situation of the country’s industry requires that all possible measures should be taken to bring it out of decline. This requirement is required in all large, medium and small industries. Industries are a source of revenue to the government and create employment opportunities for the common man. But a long list of difficulties and obstacles has led to the closure of several industries and is highlighting the downward trends in others.

According to the Pakistan Bureau of Statistics, the production of large-scale manufacturing industries recorded a decline of 11.6 percent last year, which is higher than the estimates.

According to experts, the reasons for the industrial decline include the rising cost of fuel, the economic downturn and the uncertainty of government policies. Due to restrictions on imports by the government, the closure of factories continues one after the other.  The World Bank has predicted a negative 0.4 percent GDP growth rate in the industrial and agricultural sector during the current fiscal year, while further decline is expected in the coming months.

The import ban was a compulsion of the government due to the shortage of dollars. This ban proved to be detrimental to the economy. The government estimated that the GDP growth rate would be 5.1 percent, but according to the Ministry of Finance, the World Bank and the IMF, large-scale manufacturing records show that the GDP growth rate this year was 1 percent.

 Food, tobacco, textile, petroleum products and cement sectors contributed more to the negative growth. To overcome these difficulties our economic managers have to plan effectively. Increasing foreign exchange by making the agricultural sector more active and exporting several cash-generating items should be given top priority. While there is also a need to pay attention to trade in goods for goods and transactions in alternative currencies.

Published in The Daily National Courier, April, 20 2023

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