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Sunday Dec 22 2019

Build-Asia Exhibition and the state of Pakistan's economy

BACKGROUND: A member of Pakistan Navy is seen at the Gwadar Port in Balochistan, Pakistan, April 12, 2016. REUTERS/Kay Johnson/Files; SUPERIMPOSED: Facebook/Build Asia Exhibition (@buildasia)/via

In mid-December, Karachi hosted ‘Build-Asia Exhibition’. The 15th event of its kind, it showcased variety of building materials and construction machinery.

Visible miles away from the venue were the earth-moving equipment and cranes displayed in open. Inside, all four halls remained fully occupied with stalls till the last day.

More than 250 companies from 17 countries participated in the Build-Asia Exhibition. Thanks to the China-Pakistan Economic Corridor (CPEC), one could notice every hall had unprecedented presence of Chinese companies.

The event was inaugurated by the federal minister of information technology and communication, Khalid Maqbool Siddiqui, and a number of other provincial ministers — including Syed Nasir Hussain Shah and Saeed Ghani — also visited the stalls.

After cutting the inaugural ribbon together, Iranian Consul General Ahmad Mohammadi told media that ‘Build Asia’ was one of the most important events in the Iranian calendar. It was reflected by the presence of Iran's current commercial attaché to Pakistan, Mahmoud Haji Yousefi Pour, as well as his predecessor, Morad Nemati.

Nemati — who is working on a senior position in the ministry of commerce in Iran — led the delegation of cement, tiles, ceramic, and furniture manufacturers.

The consul general offered good offices to help strengthen trade ties and encouraged businesspeople from both countries to opt for joint ventures. "Sky is the limit" once banking channels are restored, he remarked.

Companies from the United Arab Emirates (UAE), Saudi Arabia, Italy, and Belgium were among other participants, with businesspeople from all over the country descending to the city to visit the stalls.

Heavy machinery, steel, PVC, timber, glass, hardware & tools, elevators, pre-fabricated buildings, marble-cutting machinery, and marble products caught almost every visitor's eye. Wash basins, tubs, and giant decoration pieces — including elephants and lions — glittered Hall No. 3, where a number of marble companies had set up their booths.

Such expensive items have a huge market not only in Middle Eastern countries but across Europe and America as well. The problem, however, comes down to a failure to introduce cutting-edge technology in the marble industry. Thus, the country is reduced to export cheap raw material.

The exhibition is held at a time when the country is struggling to rejuvenate economic activity. Naturally, it posed a challenge to those who sought big contracts.

For the last two years, housing and construction is among the sectors trying to absorb the shock of a meltdown. As it is linked to over five dozen industries, one can imagine the trickle-down effect on those businesses as well.

The country no doubt faces a shortfall of over seven million housing units and this year should have witnessed the most activity in this field. Yet, one of the major drivers of growth is still waiting for a miracle to come out of the ICU.

The level of construction in Karachi can be gauged by the fact that Shahrah-e-Faisal was just reconstructed after five decades. One can imagine how disastrous calamities this main artery would have endured before getting carpeted now.

Since Imran Khan had come to power, Karachiites had high hopes of development activities. After all, the ruling Pakistan Tehreek-e-Insaf (PTI) had successfully secured some important seats from the heartland of the Muttahida Qaumi Movement (MQM) and development work was an obvious next step after law and order was restored.

To the sheer disappointment of Karachi's citizens, almost two years have passed and not a single new project has been initiated. On top of it, the ongoing projects are being delayed as the centre has tightened its own belt.

Seven recently-inaugurated projects in Karachi — including underpasses and overhead bridges — were all financed by the provincial government. Unveiling the plaques, Pakistan People's Party (PPP) Chairperson Bilawal Bhutto quipped: "What projects the Imran Khan had started in KP [Khyber Pakhtunkhwa] or Punjab?"

Well, the Prime Minister remains convinced he would be able to start mega projects after fixing the shattered economy. At the same time, his economic wizards juggle with the facts and figures to portray that the country is getting back on track.

These statements may seem pleasing to the ear but have little value on the ground. Top international institutions are portraying a dismal picture of 2020 and such forecasts are enough to shake the investors' confidence and keep them in a prolonged wait-and-see state.

Investors have even withdrawn money from the city’s once-booming property market. On the other hand, high mortgage rates, coupled with inflation, are enough to dream instead of buying or constructing a house.

With the spending hands paralysed, the property market is down almost 30 percent. And the top developers believe that it would take more time before the construction and development activity returns to normal. To them, the Federal Board of Revenue's (FBR) hanging sword is the root cause of the problem.

No doubt, Prime Minister Imran Khan had come to power with a catchy slogan of "accountability for all" and he should be lauded for having a number of those, who are always bracketed above the law, arrested. Ironically, however, every single one of them was released or enjoying bail right under his nose.

This was long coming for their arrests had forced the business community to hibernate. Now, this thin-skin fraternity fears that the sword may fall only on them.

Restoring their trust should be the top priority. They are the driving factor in spinning the wheel of the economy and giving relief to a common person and, thus, deserve attention.

In order to revitalise economy, it’s high time the government relaxes the FBR's rules and give breathing space to those who matter the most.

Otherwise, the ‘Naya Pakistan’ dream would remain elusive and events such as Build-Asia Exhibition would only give space to countries that produce cost-effective materials. A grave trade imbalance doesn’t allow Pakistan to afford this luxury.

Real efforts, therefore, are required to reduce imports and bump up the exports of goods, not human resources.