Mobile Industry Of Pakistan To Endanger 40,000 Jobs
Foreign investors are discouraged by policy changes brought on by changes in the political landscape and prefer to wait it out until everything is settled, according to Allawala.
The mobile phone industry of Pakistan, which has done well so far, is in danger of collapsing, endangering 40,000 jobs.
Participants of mobile phone industry claim that, given that mobile phone assemblers are unable to open the necessary number of letters of credit (LCs) to meet their raw material needs, the current situation is very different from that of early last year.
Completely knocked down (CKD) parts for the assembly of mobile phones were allowed to be imported under a quota of $80 million for domestic assemblers. In this case, the shutdown of the assembly lines could result in the layoff of up to 40,000 workers from jobs in mobile phone industry.
According to a statement from the Federal Minister for IT and Telecommunication, Pakistan’s assembly plants produced 19.7 million mobile phones and smart devices in 2022 for a total of Rs 9.7 billion.
According to Tecno Pack CEO Aamir Allawala, domestic demand for mobile phones is estimated at 36 million annually, or an average of 3 million per month, including 1.4 million smartphones.
He noted that the data was gathered between April and May of 2022, before the market experienced the later disruption brought on by the lack of foreign exchange.
In January 2022, there were 2,750 employees working for the company, but “only 1,000 are left as we can only maintain the situation for a few more days,” the CEO said. He asked, “How long can we keep employing these people without doing business?”
He believed that foreign direct investment (FDI) could help Pakistan close its trade deficit. With Chinese businesses and investors who are eager to invest in the nation, we can create joint ventures.
For that, the nation must address the severe political unpredictability and attract foreign investors by fostering an environment that is conducive.
Foreign investors are discouraged by policy changes brought on by changes in the political landscape and prefer to wait it out until everything is settled, according to Allawala. Pakistan, which has a population of over 220 million, is large enough to draw investors from all over the world.
He said, “We can do it again.” In the last ten years, we have overcome two major challenges, namely law and order and the energy shortage. He emphasized that Pakistan could increase FDI if political tensions were reduced and policies were well coordinated. “To protect the legal rights of foreign investors, we should also provide them with a separate legal system.”
In addition, he suggested that, like other nations in the world, a separate taxation system be in place to deal with foreign investors.