Massive bankruptcies expected in early 2009

Massive bankruptcies expected in early 2009

The business community is expecting massive bankruptcies in early 2009, due to latest Pak-India tension in the backdrop of November 27 Mumbai attacks coupled with prevailing power and gas load shedding countrywide.

Right from retail to the wholesale markets and the Small and Medium Enterprises (SMEs) to the large-scale units, everyone from the business community is very much concerned over the prevailing negative trend in the business.

Interestingly, the government should focus on releasing development funds, instead of stimulating development activities, moreover the government should avoid working much fashioned 'stimulus plan' like rest of the world, businessmen said.

The large scale units are facing acute power and gas shortage, putting their machines off and the export-oriented industries, particularly the SMEs, are losing hope on any worthwhile 'relief package' in the days ahead.

"A delay in payments is very much likely against export shipments from apparel sector and majority of the apparel sector would be unable to meet recovery schedules of banks," said one leading exporter from hosiery sector. Another from Ready made Garments sector pointed out massive bankruptcies ahead with rising number of defaults.

"Heavy closures are in the offing across the board due to unfavorable state of affairs in the field business," said another exporter. Similarly, hopes regarding continuity of Research & Development (R&D) fund are also dying fast despite the fact that the IMF has agreed with the government for its continuity for value-added sector.

Those in retail and wholesale business are blaming electronic media for spreading fears on possible attack from India. According to them the panic has spread all around the markets and no one is ready to make fresh deals unless uncertainty fizzles out.

It is also worth mentioning that a good number of B-3 consumers have already shut down their businesses across the country due to unprecedented power shortage, continuing from last November. Reliable sources in the industry as well as the power sector revealed that the electricity consumption of B-3 consumers has slashed more than half in the last year, which reflects heavy closure in spinning and weaving sectors.

And those having captive power plants have entered into last round of a lost battle with the government over gas supply to their power generation units. The textile sector is striving to convince the government policymakers that supply of uninterrupted gas to its units carries worth than the CNG stations.

Meanwhile, sources in the Planning & Development Board admitted that the progress on ongoing as well new development schemes is terribly low. A string of meetings is in the process at the P&D Board at present to pursue different departments on gearing up development pace in the province ahead of mid-year development review meetings, scheduled in January. A scarcity of funds, as a matter of fact, has put all development priorities of the government on backburner, which is supposed to support some 40 different industries linked directly and indirectly with construction.

A change in fund release policy is underway before the Chief Minister Punjab Mian Shahbaz Sharif avails the opportunity of suspending a few more development planners in upcoming mid-year development review meetings.

Punjab government to promote SMEs at grass-root level

Punjab government to promote SMEs at grass-root level

After launching the food stamp scheme in Punjab, Pakistan Muslim League-N led coalition government in Punjab is planning to undertake a programme of vigorous industrialisation and small and medium enterprises (SMEs) in the urban and rural areas of the province to absorb unemployed labour.

Sources in the PML-N told Business Recorder here on Tuesday that the major aim of the socio-economic policies of the PML-N led government is to create employment opportunities in order to reduce poverty and at the same time to ensure a fuller utilisation of the country's human resources for productive purposes.

Poverty alleviation is one of the important objectives of the PML-N led coalition government and the food stamp scheme has been launched in a bid to help the have nots to tackle poverty. "The PML-N government is launching a series of dialogue with the stakeholders to devise a policy for promotion of SMEs at grass root level", the sources said.

PML-N Lahore Vice President Shahbaz Haider said that provision of better health and education facilities to masses is the foremost priority of Chief Minister Shahbaz Sharif who is working day and night to change the fate of the people.

Analysts say there is considerable poverty in the fast growing cities of Punjab. Poverty in the urban areas is growing faster than the rural areas due to high food inflation and escalating price hike.

Beggary in Pakistan is now an established profession which is getting stronger in urban areas, they added. Coercive child beggary is also on the rise, with the parents forcibly sending their children out on the streets to beg, they say. Punjab Minister for Population Welfare, Neelam Jabbar Chaudhry said that poverty alleviation is only possible with the provision of modern educational facilities to all segments of the society.

She said the Punjab government has introduced reforms in education, health and other social sectors in a bid to provide relief to the masses apart from improving their standard of living.

In order to achieve desired results of the reform agenda, she said a comprehensive and effective monitoring and evaluation system is being implemented at district and provincial levels. She said that Rs 58.64 billion would be spent on social sector development programme whereas, Rs 30 billion have been earmarked for educational development projects and Rs 26.10 billion would be spent for the provision of healthcare facilities to the masses in the current fiscal year.

Under the universal primary enrolment campaign, 1.7 million children would be enrolled in the schools however, 100 percent children would be ensured to admit in the schools.

Huge amount is being provided for the provision of computers to 4000 high schools whereas, model schools will also be established at tehsil headquarter level, in addition free air-conditioned bus service would also be provided for pick and drop facility to the matric level students of less developed areas in the province, she added. Reacting to resignation of Pervez Musharraf, Neelam Jabbar Chaudhry said that Pakistan got independence through a democratic struggle and with vote power.

She said that Pakistan came into existence in the month of August and dictator Pervez Musharraf also resigned in the month of August whereas, another era of dictatorship of General Zia-ul-Haq finished in the same month and it was proved that dictatorship cannot stand in front of people's power.

Neelam said that Shaheed Mohtarma Benazir Bhutto's statement "democracy is the best revenge" has been proved; however, now it was the responsibility of the democratic forces to solve the people's problems and overcome the economic crises. She said that parliament is the elected body of people of the country and also answerable before the people, therefore, coalition government would ensure the supremacy of the parliament.