Rava is an online news portal providing recent news, editorials, opinions and advice on day to day happenings in Pakistan.
Expressing concerns to a proposal sent to the government to reduce the tariff on imported finished or semi-finished steel products. The domestic industry has stressed that the move would destroy the industry and unleash a new wave of unemployment in the country.
The National Tariff Commission recommended earlier this year to the Tariff Policy Board that the tariff on imported finished or semi-finished steel goods should be rationalized, but the local industry resisted it and faced delays.
According to the steel sector, the proposal is being considered again with a few minor tweaks.
“Any reduction in tariff on imported finished or semi-finished steel products under the garb of tariff rationalization will result in de-industrialization in the country followed by the closure of steel industry,” remarked Pakistan Association of Large Steel Producers Secretary General Wajid Bukhari. “It will also trigger massive unemployment across the country.”
Bukhari pointed out in a statement on Wednesday that the reduction on import tariffs without having a globally competitive business environment in Pakistan will definitely cause de-industrialization.
Quoting figures, Pakistan ranked dismally low at 110th spot on the Global Competitiveness Index of the World Economic Forum, which indicated that the local market environment was not competitive compared to other countries.
“All major steel-exporting countries fare much better than Pakistan in the competitiveness index,” he said. The domestic steel industry had invested billions of rupees in recent years to add new capacity and introduce world-class technology in order to improve efficiency and competitiveness, he highlighted.
However, “the government also needs to play its part and work on the much-needed structural reforms to reduce the cost of doing business, enable fair competition, fix tariff anomalies and facilitate core industry issues before considering tariff rationalization,” he said.
According to him, in the domestic steel industry there was no evidence of any sort of export bias and cut-throat competition prevailed when existing margins were close to null.
“Resultantly, there is no evidence of abnormal profits either,” he said. In fact, the steel industry has been successful in bringing new capacity and technology to meet quality and quantity requirements of the economy.
“The steel industry supports import substitution worth over $1.2 billion per year,” Bukhari said.