The Lahore Chamber of Commerce and Industry has urged Prime Minister Yousuf Raza Gilani to convene an emergent meeting of the Federal Cabinet over the SBP second quarterly report, which has given an alarming picture of the country's economic scenario.
Chamber President Mohammad Ali Mian said in a statement issued on Tuesday that the SBP report had exposed the policies of the previous government who instead of taking long-term measures for the development of the Large Scale Manufacturing sector and Small and Medium Enterprises adopted the policy on ad hoc basis and kept the masses in darkness.
He also took a strong exception to the Trade Development Authority of Pakistan (TDAP) for failing to rise up to the occasion and did nothing to explore new markets for Pakistani merchandise. The most of the country's exports remained confined to a few countries including the US and the UK. Had the TDAP been able to issue guidelines for exporters through chambers of commerce in the country, the situation would have been quite different, he said.
"The growth in Large Scale Manufacturing fell to 4.5 percent during July-December as compared to previous year's six month growth of 8.3 percent. This is alarming, especially in textile sector export growth which recorded a growth a fall of 3.4 percent during this period. The textile sector earns over 60 percent of entire export earnings of the country", he added.
About the fast widening trade deficit, the LCCI President said that the situation would further worsen next year as according to SBP report, instead of making payment, the previous government provided guarantees to the oil companies which borrowed from banks through these guarantees. This hidden spending will appear next year as fiscal deficit.
He said that quite in line with the concern of the Lahore Chamber of Commerce and Industry that the SBP has said that domestic energy woes are also responsible for relative slow economic growth. He said that the Prime Minister Yousuf Raza Gilani has given a plan to produce 2200 MW electricity besides an energy conservation formula and if the both are implemented, the industrial sector would definitely get a lease of life.
He also aired concern over understatement by the previous rulers to keep hidden the huge spendings. He said he hoped the prime minister's austerity drive would help control the situation in this particular area.