The threat of an economic crisis is endangering 40,000 jobs in Pakistan’s mobile phone industry, which has been performing well so far.
Industry insiders claim that the situation is quite different from early 2013 when the mobile industry was in peril. This is because mobile phone assemblers cannot open enough letters of credit (LCs), to meet their raw material requirements.
For the import of completely knocked-down (CKD) parts to assemble mobile phones, domestic assemblers were granted an $80 million quota. Closed assembly lines could result in around 40,000 job losses for those working in this industry.
According to a statement by Federal Minister for IT and Telecommunication Syed Aminul Haque, Pakistan’s assembly plants will produce 19.7 million smartphones and smart devices in 2022. The estimated value of these devices is around Rs. 9.7 billion.
Aamir Allawala, CEO of Tecno Pack, stated that the domestic demand for mobile phones was estimated at 36,000,000 per year. This is an average of 3,000,000 per month and includes 1.4 million smartphones.
He pointed out that the data was collected during April-May 2022 when there had been no disruption in the market. The disruption was caused later by the inability to obtain foreign currency.
According to the CEO, they had 2,750 employees as of January 2022. However,
Now only 1,000 are left as we can carry on with the situation for only a few more days. How far can we continue to employ these employees without doing business?
He believed that foreign direct investment (FDI) could help Pakistan to reduce its trade deficit.
We can create joint ventures with Chinese investors and companies, who are keen to invest in the country
To do this, the country will need to resolve the existing political uncertainty and create a favorable environment for foreign investors.
Allawala stated that foreign investors are discouraged by policy revisions and changes in the political setup. He suggested that they prefer to wait until the dust settles.
Investors can travel to any country that has a population as large as Pakistan’s, with over 220,000,000 people.
He noted that “We have overcome two major challenges, ie law, and order as well as energy shortages in the past decade and we can do this again.”
He stressed that Pakistan could attract more FDI if it lowered its political climate and consolidated its policies. To protect foreign investors’ legal rights, “we should also provide a separate legal system.”
The CEO also suggested that foreign investors should be treated with a separate tax system, just like in other countries around the world.
Source: Express Tribune