Paapam terms dissolution of EDB an anti-industry move

KARACHI (Staff Reporter): PAAPAM has termed the decision to dissolve the Engineering Development Board (EDB) as a recipe for disaster for the country’s engineering sector. Mashood Ali Khan, Chairman PAAPAM, accompanied by former chairmen of the Association Shariq Suhail, Munir K Bana and Aamir Allawala, at a press briefing held at a local hotel here Thursday, expressed serious reservations on the discussion held in a recent meeting of the CCoE during which EDB was criticized for delaying approvals of CPEC power projects and supposedly involved in rampant corruption. This led to a directive from the Prime Minister to dissolve the organization since it was no longer able to serve any useful purpose. “The above measure, if implemented, would gravely affect the industrialization targets set by Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar, and set back the progress achieved by PML(N) govt in the industrial base in general and auto industry development in particular,” said Mashood Ali Khan.

Interestingly, through an amendment made in the Finance Bill 2016-17, the requirement of EDB’s verification for availing duty exemption has already been removed for IPP projects above 25MW. Therefore, apparently, the CCoE may have been wrongly briefed about ‘so called’ delay in processing of power project proposals by EDB. In fact, EDB’s role for processing cases of power projects over 25MW has been handed over to the Ministry of Water & Power. In the light of this scenario, the CCoE needs to review its uncalled for criticism and unjust position taken on EDB’s performance, he added.

Chairman PAAPAM said that the auto industry has been engaging with EDB ever since its inception in 1995. Over these 20 years, there has never been a single scandal of corruption or malpractice at the EDB. On the contrary, the organization has played a major role in nurturing the domestic auto industry and promoting the growth in localization of auto parts in Pakistan (and saving valuable foreign exchange for the country).

In 1995, hardly 10%~15% of parts for passenger cars were produced locally. Today this figure has touched 70%. Similar trends were witnessed in case of motorcycles, trucks, buses & tractors. The industry was able to achieve these milestones only due to diligent implementation of deletion programs and tariff based systems by the EDB.

He pointed out that unfortunately, since 2010, the government has failed to give due importance to EDB or the engineering sector. EDB was kept under-staffed and under constant pressure to operate with limited resources and even operated without a CEO for almost 3 years between 2012~2015. Finally, once again, EDB is without a permanent CEO since March 2017. “How can one expect any organization to remain functional without a full-time & competent Chief Executive Officer?” he questioned.

PAAPAM members assured the Prime Minister that there is no merit in the corruption allegations being levelled against EDB officials. ”Our members can vouch that they have not experienced any instances of corruption at any level in EDB, although all of them have an ongoing working relationship with the organization ever since its inception,” they added.

Govt support imperative for development of textile sector: FCCI

FAISALABAD(Staff Reporter): A phased and comprehensive strategy is imperative for the immediate revival and sustained development of the textile sector, said Engineer Ahmed Hassan, acting president of FCCI. He said that the existing power looms should be upgraded in order to switch over to technical textile in addition to producing the traditional cheap grey cloth. "The old, obsolete and depreciated machinery should also be replaced to increase the profitability of power looms owners". However, comprehensive value addition in the shape of fashion garments is necessary to earn optimum profit from the textile chain", he said and added that it is the last stage of cotton that could bring maximum profit. Continuing, Ahmed divided the weaving sector into organized and unorganized sector and said that the organized sector has its own sufficient resources and capacity to upgrade its production but for the unorganized sector, govt has to dole out necessary facilities and incentives for the replacement of old and depleted machinery.

He said that use of obsolete machinery is not only affecting our production but is also a major cause to increase the cost of doing business. He said government has to carve out a workable strategy under which we could enhance the performance of old machinery in addition to convincing small weavers to replace the old machinery with high tech and sophisticated machinery. He also mentioned the technical textile center established in collaboration with Korea in National Textile University (NTU) and said that we must strengthen our linkages with these centers in order to adopt new technologies. He further said that in next phase the process of upgradation should be started with the increase in profit of the SME units.

“In this connection, the government has to provide necessary incentives so that they could easily meet the additional expenditures for the purchase of new machinery. This will enable our SME sector to produce quality products which are in great demand in the international markets. Similarly these export products will get better prices,” he added.

Engineer Ahmed Hassan also stressed optimum value addition in cotton related products. He said that our future objective should be to produce and export garments and fashion garments instead of exporting raw cotton yarn or low priced finished and semi finished products. He was also of the view that there was need for diversification in cotton chain. We should mix polyester with cotton to produce a wide range of textile products which cater the needs of different markets, he added. He said that the government is ignoring this sector which is earning precious foreign exchange in addition to providing job to millions of students. He said that in the absence of textile minister this sector was facing decline while government institutions are also eroding this well established sector in the name of diversification. He said that we support diversification but it doesn't mean to destroy the already established industry that was earning precious foreign exchange from the cotton chain.

Engineer Ahmed Hassan demanded of Prime Minister a full time textile Minister who can work day and night for the revival of textile sector. In this connection, he specifically spelled out his concern about Rs180 billion textile package and said that this package has not been implemented in its true spirit. Similarly, the nonpayment of refund claims was yet another factor that has made the textile export a non lucrative business.

EU, Japan seal free trade in

signal to Trump

BRUSSELS (Reuters): Japan and the European Union agreed on Thursday to a free trade pact, creating the world's biggest open economic area and signalling resistance to what they see as U.S. President Donald Trump's protectionist turn. Signed in Brussels on the eve of meetings with Trump at a summit in Hamburg, the "political agreement" between two economies accounting for a third of global GDP is heavy with symbolism. It leaves some areas of negotiation still to finish, though officials insist the key snags have been overcome. "Ahead of the G20 summit tomorrow, I believe Japan and the EU are demonstrating our strong political will to fly the flag for free trade against a shift towards protectionism," Japanese Prime Minister Shinzo Abe told a joint news conference with EU institutional chiefs Donald Tusk and Jean-Claude Juncker. "It is a strong message to the world."

In the works for four years, it has been pushed over the line towards a final treaty signature in the coming months by the election of Trump and his moves to ditch a Pacific trade pact that included Japan and leave talks with the EU in limbo.

"Although some are saying that the time of isolationism and disintegration is coming again, we are demonstrating that this is not the case," European Council President Tusk said.

"There is no protection in protectionism," added Juncker, the president of the executive European Commission, who played down any suggestion there would be further negotiating problems and said he hoped the treaty could go into effect early in 2019.


Fears of cheaper import competition for European carmakers and Japanese dairy producers were among the thorniest issues, but officials said the two sides were driven by a shared alarm at Trump's apparent shift away from multilateral open trading systems towards an aggressive "America First" policy.

Tariffs on much of their bilateral trade -- which Abe noted accounts for some 40 percent of total world commerce -- will be phased out over some years and other economic areas, such as Japan's public tender system, will be opened up.

Both sides, which are also forging a parallel cooperation agreement on broader political issues such as security, crisis aid and climate change, forecast that the deal will boost economic growth and employment in Japan and in Europe.

One detail to be ironed out is how complaints from business over how authorities apply the treaty will be dealt with. That is a touchy subject in Europe due to concerns that trade pacts give too much power to big multinationals. European parliaments nearly blocked a deal with Canada last year over such issues.

The European carmakers' lobby had called for at least seven years to phase out tariffs of up to 10 percent on Japanese cars, and a senior EU official said they would "not be disappointed".

Most EU food exports to Japan will see tariffs removed over time, although in some sensitive sectors such as cheese and other dairy products they will still be limited by quota.

More than 200 European products that benefit from geographic protections -- for example Parma smoked ham must come from around the Italian city -- would not face Japanese competition under those names, he added.

Scotch whisky might not benefit from such a deal, however, as Britain is due to leave the EU in 2019.

Tusk took the opportunity to scoff at arguments in Britain for Brexit on the grounds that London could cut itself better trade deals outside the Union. EU leaders say the weight of the combined economy can more easily crack open foreign markets.

In an ironic nod to Brexit supporters' rallying cry of "Global Britain", Tusk, a former Polish premier, signed off a tweet confirming the Japan deal with the words "Global Europe!"

German industrial orders rebound in May

FRANKFURT AM MAIN (AFP): Industrial orders in Germany rebounded in May after a slide in April, preliminary official data showed Thursday, but fell short of analysts' hopes for Europe's largest economy. There were 1.0 percent more new contracts in May than in the previous month, correcting for seasonal effects, federal statistics office Destatis said in a statement. May's rebound was well short of forecasts from analysts surveyed by data company Factset, who had predicted growth of 1.9 percent. Destatis noted that discounting more volatile large contracts for items like aircraft showed a slight contraction of 0.3 percent in overall orders in May, correcting for seasonal and calendar effects. Revised figures also showed that the fall in April was larger than previously thought, at 2.2 percent compared with March. Industrial orders are closely watched as an indicator of the future level of activity in an economy. Looking more closely at May's figures, a 3.1-percent increase in orders from abroad accounted for all of the growth, while demand from within Germany fell by 1.9 percent.

Contracts from eurozone neighbours grew 1.7 percent and demand from the rest of the world expanded more than twice as fast, at 4.0 percent.

Across different industrial sectors, producer goods makers saw demand shrink 0.7 percent and consumer goods firms lost 2.9 percent.

Meanwhile, capital goods makers enjoyed 2.6-percent growth in orders.