Islamabad:
While Pakistan is struggling with an extended trade deficit, an increase in unemployment and an exodus of multinational companies, experts urge the government to adopt a more aggressive protectionist approach – similar to the “America First” strategy of US President Donald Trump – to protect national manufacturing.
Trump’s economic policy, which was based strongly on import prices and punitive measures against the production of outsourcing of American companies, was cited by analysts Shahbaz Rana and Kamran Yousaf in Express News Show “The Review” as a model to emulate.
“We want to build, create and develop more products in our country using American work, American products and the American grain,” said Trump in a July 17 speech at the White House when he launched the week “Made in America” in his “America First” approach.
Trump did not just promote American industry – he forced him to return to the ground through prices and threats of action, said analysts, adding that Pakistan must do the same if we want to avoid economic collapse. “We have to follow Trump’s strategy: protect the local Pakistan industry.”
Pakistan’s trade deficit jumped 33% in just three months, reaching $ 9.4 billion, according to official data. Meanwhile, large companies such as Procter & Gamble, Telenor, Microsoft and Gillette have either closed operations or have significantly reduced.
Analysts attribute this drop to a combination of sudden prices reductions, increase in costs to do business and a lack of protection against spilled imports, especially China. In June, the government reduced import rights overnight, a decision which, according to criticism, left local manufacturers vulnerable to highly subsidized and undervalued imports.
The hardest sectors include steel, paper and board, electronics, pharmaceutical products, building materials, textiles and food packaging. Industry organizations report that Chinese exporters regularly modify product specifications to circumvent existing anti -dumping measures, flooding the market of products almost identical to prices lower than the market.
Efforts to fight against the spill were also blocked by legal obstacles, according to analysts. Although the National Prices Commission (NTC) has imposed tasks in several cases, manufacturers complain that the application is low due to prolonged legal battles and legal interference. “Once the functions have been imposed, the cases are translated before the courts, sometimes for years,” analysts said.
“Even after the final decisions, the application of the law remains uncertain,” said analysts, describing “unfair dumping as a death sentence for the Pakistani industries”.
A recent IMF report on the Pakistan’s judicial system has revealed that commercial conflicts obstruct the courts, with a slowdown in arbitration affecting the confidence of investors and the application of policies.
Local manufacturers also indicate structural drawbacks that prevent them from competing fairly:
• High tax burden: Company tax is 29%, with 10% of 10% of additional taxes on taxes and dividends, which makes the tax burden total of 50%.
• expensive public services: electricity and input costs in Pakistan remain significantly higher than in regional competitors.
• Problematic commercial offers: the free trade agreement (ALE) 2005 with China – and its extended phase II signed in 2019 – opened the Pakistani markets to foreign goods without adequate guarantees for local industries.
While national companies closed, unemployment continues to climb. The World Bank has attributed the increase in poverty to Pakistan in part to a faulty economic model which favors trade in industrial development.
Analysts warn that once local businesses leave the market, importers who initially threw inexpensive goods often increase prices, creating monopolies and contributing to inflation. “This is a classic domino effect,” said analysts. “Deindustrialisation comes first, then job losses, and ultimately, long -term economic dependence on imports.”
Industry leaders urged the government of Prime Minister Shehbaz Sharif to take immediate corrective measures. Recommendations include the reconstruction of pricing protections for vulnerable sectors; empower the NTC with faster application mechanisms; Reform the sales court system to prevent endless disputes; Revisiting the trade agreements that expose local manufacturers to unfair competition; and publish the IMF state report to increase transparency and responsibility
“There is a clear choice before the government,” said analysts. “Let us continue on the way to feed foreign industries and kill jobs at home-or take daring measures to build a manufacturing economy and protect national economic sovereignty?”
Analysts said that if we want Pakistan to survive economically, we have to follow Trump’s strategy – not in words, but in a difficult and without excuse action.
