The auto sector of the country while showing serious concerns has requested to the federal information minister to ensure consultation with the sector about new entrant policy before making any final recommendations for ECC.
The Federal Minister for Information is heading a sub committee constituted by the Economic Coordination Committee of the Federal Cabinet to evaluate the proposal by Ministry of Commerce to allow new investment with additional incentives over the existing tariffs and regulations. Pakistan Automotive Manufacturers Association (PAMA) Director General Abdul Waheed Khan and Pakistan Association of Automotive Parts Accessories Manufacturers (PAAPAM) Chairman Syed Nabeel Hashmi have made this request in a letter to Ministry of Information & Broadcasting Federal Minister Qamar-uz- Zaman Kaira.
They said that unfortunately the voice of auto industry, which is the major stakeholder in this issue, has totally been ignored in government’s policy of extending tariff concessions to new entrants.
‘Both these organizations are the only officially recognized representatives of the OEMs and the vending industry working in the country. On the other hand, the sub-committee formed in this regard by the government has been gracious in allowing the opportunity to a particular foreign investor to make presentations to it and thus influence the decision making process in its favor,’ they stated in the letter. But a decision reached and policy developed without having an opportunity to listen to both sides of an argument cannot be balanced, they reasoned, adding that the motorcycle sector is the most vibrant sector of the industry. It has registered a growth of 37 percent on year-on-year basis over the last 10 years and no other sector has shown such consistent high growth.
They stated that policy interventions are being made in this sector just to appease interest of persons related to a single investor in total disregard of the interests and concerns of an industry which has billion of rupees of investment and is supporting direct employment for around 200,000 skilled and semiskilled jobs. Motorcycle industry has a high multiplier effect due to its forward and backward linkages and is supporting around 1.5 million jobs in different sectors of the economy, so the way the policy is being developed for this sector is most unfortunate indeed, they stated in the letter. They further said that ‘the proposed policy shift will have serious ramifications for the vending industry of 800 odd players, as the technology transfer rolls back, investment decisions are suspended and will have long-term negative impact on investors confidence on governments policies for future investment.