Local smartphone assembly has been on the rise in Pakistan over the past years. Several major companies including Samsung and Xiaomi have set up their mobile phone assembly units here with hopes to lower local prices for handsets.
Unfortunately, local phone assembly may be coming to an end soon as several plants are on the verge of a halt, according to a report by Express Tribune. This is because letters of credit (LCs) for import are not being opened due to a shortage of dollars since May 20. For that reason, there is a significant deficit of raw materials needed for assembly.
The State Bank of Pakistan (SBP) has made a statement saying that it has not stopped import payments and that commercial banks have enough dollar liquidity to make necessary payments. The inter-bank market has made import payments worth $4.7 billion during the current month so far.
Naturally, this is becoming a cause for concern for multiple OEMs and their business units. Tecno Pack Electronics CEO Aamir Allawala has said that:
Now, the industry has used all its raw materials and 80% of the industry is closed, unfortunately. Jobs of almost 50,000 people working in the industry are at risk.
Eventually, this will halt the supply of locally manufactured low-cost mobile phones, and only those who can afford imported phones will be able to buy them. ICT expert Parvez Iftikhar said that “We will have to say goodbye to our dream of becoming an exporter of mobile phones”.
Automobile manufacturing companies like Proton, Toyota, and KIA have also announced layoffs.