Forex-PK

20 May 2009

Industry seeks concession for high-duty products

KARACHI: The NWFP should be declared a war-affected province owing to its role as a frontline area in the war against terror as industry and businesses there have been badly affected, Sarhad Chamber of Commerce and Industry President Sharafat Ali Mubarak told The News while talking over phone.

Pakistan and the US are in negotiations to establish Reconstruction Opportunity Zones (ROZs) in NWFP and Federally Administrated Tribal Areas (FATA) in an attempt to increase industrialisation and employment opportunities in these areas. Products manufactured in these zones would get duty-free access to US markets.

Mubarak said a bill for ROZs was put before us, but we had some reservations that were conveyed to the government of Pakistan. We were told to set up industries and produce certain items which have six to eight per cent duty in the US.

Although we welcome the idea, we asked the government to include those items which have 20 to 25 per cent duty in the US so that our products could get a considerable tax holiday, otherwise who would like to set up an industry in war-affected areas, he explained.

ROZs would be established in both NWFP and FATA which have been severely affected during the 30-year conflict just across the border in Afghanistan. Government should support the industry in NWFP and FATA through considerable incentives, he demanded.

He said the industry in NWFP was going through difficult times where law and order was the main problem. We strongly urge both the governments of Pakistan and the US to implement the project soon as this would certainly have a very positive impact on the overall manufacturing environment in these areas.

When told that some of the industrialists from other parts of the country had termed ROZs infeasible, he said this is not true, adding the process of ROZs would take two to three years to complete and until then the situation in the troubled areas would stabilise.

We have been in contact with the commerce ministry as ROZs should be started from NWFP owing to its bad situation. The SCCI should be consulted at all the stages as without the Chamber, which is a stakeholder, no workable solution is expected, he added.

Pakistan Bedwear Exporters Association Chairman Shabir Ahmed said the concept of ROZs was bound to fail because it would be difficult for the government to handle such a big project. There is a possibility that goods produced in other parts of the country, and not in these zones, would be exported under this facility to achieve the duty advantage, he said.

People may misuse this tax-free facility as all finished goods will come to the Karachi Port for export, which will lead to misrepresentation and bring bad name to Pakistan, he explained.