KARACHI – The intermittent protest by hundreds of dock workers at Port Qasim is feared to result in a serious blow to the country’s exports which the economic managers expect would fetch over $22 billion this year, thus helping Pakistan balance its external accounts.
The analysts believe that after achieving a $26 million current account surplus during July-December 2010-11, the terrorism and floods-hit Pakistan is expected to see its external accounts widening by $4 billion or two percent of the GDP during the second half of the current fiscal year.
“The overall deficit may swell to $4 billion as oil prices in the international markets are expected to go up due to political turmoil in the oil-rich Middle East,” Khurram Shehzad from InvestCap Research told Pakistan Today.
The fate of over 1,700 dock workers at Port Qasim is hanging in balance as the operators of dedicated terminals argue that they have no room for manual work at their fully-automated terminals. As the oil prices and other negatives seem to be a distant threat to Pakistan’s financial accounts, an uncertain law and order situation at the country’s second largest seaport, Port Qasim, poses an immediate risk to exports.
According to sources, hundreds of vehicles laden with exportable containers are stuck at the port entrance as result of workers’ protest. With the government seems to be totally unwary of the situation, the cargo handling at the Port Qasim is suffering from the months-long intermittent face-offs between the workers and the Port Qasim Authority (PQA) with the former demanding job at fully-automated dedicated terminals like Grain and Fertiliser Terminal of Fauji Akbar Portia (FAP).
“Hundreds of containers containing textile goods like bed sheets, garments, apparel etc are awaiting shipment at the port,” exporters told Pakistan Today. Mohsin Ayub Mirza, former chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), warned if the government did not intervene, the exporters would have to bear losses of billions of dollars on account of shipping airfreight.
“The exportable containers are piling up,” Mirza said as he demanded an immediate intervention by the government to sort out an amicable solution to the workers’ problems that, he said, might be genuine. He said if not shipped on time, the export consignments would become a liability for the local exporters who would have to pay $15,000 to $20,000 on each 20-feet container as airfreight.
“It totals in billions of dollars when you pay thousands of dollars under the head of Freight-on-Board that the exporters are liable to pay in case of failure through sea route,” the ex-PRGMEA chief said. Mirza said strategic places like seaports are the lifeline for the country’s economy and should, therefore, be well-protected by the government.
It is worth mentioning that textile products, particularly the value-added ones, fetched over $6.91 billion for Pakistan during the first seven months of current financial year and are, therefore, set to play key role in enabling the funds-starved country keeping deficit-prone external accounts in check.
The provisional figures of the State Bank of Pakistan show that during July-January 2010-11, the country’s current account deficit stood at $81 million against $3.05 billion of the corresponding period last year, registering a remarkable shrinkage of $2.971 billion or 97.34 percent.
