Over 30 percent of Pakistan’s workers laid off amid economic meltdown — industry insiders

Over 30 percent of Pakistan’s workers laid off amid economic meltdown — industry insiders
A worker monitors automatic copper wire unit at the Fast Cables plant in Lahore, Pakistan, March 24, 2017. Picture taken March 24, 2017. (Reuters)
Updated 22 September 2019

Over 30 percent of Pakistan’s workers laid off amid economic meltdown — industry insiders

Over 30 percent of Pakistan’s workers laid off amid economic meltdown — industry insiders
  • During last fiscal year, a million people lost jobs and four million were pushed into poverty: Dr. Hafiz Pasha
  • “Unprecedented severity” is squeezing the middle class that brought PTI government to power

KARACHI: Pakistan’s economic meltdown has eroded between 30 and 40 percent jobs from the country’s labor market, pushing more people below the poverty line, as the country takes tough measures to implement conditions attached to an International Monetary Fund (IMF) bailout package, traders and economists said.
Pakistan’s ruling Tehreek-e-Insaf (PTI) came into power on the back of promises to provide 10 million jobs last year, but is struggling to retain even existing jobs as the country’s economic growth plummeted from 5.8 percent to 3.3 percent in the last fiscal year, and is predicted to slow down further to 2.4 percent in the current fiscal year, FY20.
The country, that signed off on a $6 billion stabilization program from the IMF has implemented tough taxation measures, increased tax rates and prices of energy, and devalued its currency more than 40 percent while jacking up key interest rates to 13.25 percent.
These measures have declined industrial production and aggregate demand resulting in more unemployment in society, according to experts and industry insiders.
“Last year, it is estimated that around one million people lost (their) jobs, and this year as the economy has slowed down it is expected that around 800,000 to one million more people will be rendered jobless,” Dr. Hafiz A. Pasha, senior research economist and a former finance minister of Pakistan, told Arab News.
He blamed the government’s negotiations of the IMF stabilization program, and compared the current state of Pakistan’s economy with a “vehicle stopped in a way...that it has completely collapsed.”
“The budget is heavily taxing basic commodities and services. The speed and nature of adjustment is all flawed. During 2018-19, four million more people became poor. That may be the same or more this year,” he said.
In recent years, import-led consumption had propped up growth in the South Asian country of 208 million people, and helped hide the problems of an economy riddled with inefficiency and without a strong export base.
Now, industrialists and traders say every sector of the economy is bearing the brunt of the economic meltdown, which has forced industries to cut back on their production and manpower as demand dries up.
“The auto-industry has started closing down, and the production has reduced by more than 50 percent,” Dr. Mirza Ikhtiar Baig, Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry, told Arab News.
“Similarly, the same situation is (being faced by) our textile industry. The banks charge interest rates at 16-17 percent due to which the financial cost...has become very expensive,” he said.
“The defaults (on loans) are now becoming higher... the default of only the textile sector is 30 percent as of today,” Baig said.
This week, Indus Motors, the makers of Toyota cars, announced a shutdown of their manufacturing plant in Pakistan for the rest of September, following a fall in the sale of vehicles as car prices skyrocketed, due to rupee depreciation and taxation measures.
“This is painful,” Baig said. “I can’t quantify it, but the job cuts are in lacs (hundreds of thousands). Every industry has laid off workers and closed down shifts,” he said.
With an estimated job multiplier of up to eight times for every direct job in the auto sector, auto assemblers and the auto vendor industry is on edge.
“Car makers have reduced their shifts, cut down their working hours and are sending workers on compulsory holidays. Sales are down 60-70 percent,” Aamir Allawala, a leading auto-parts maker, told Arab News.
“A similar slump has been recorded in the production of motorcycles, tractors, trucks and buses,” he said.
As bigger industries face the challenges of survival, the country’s small businesses now find themselves on the brink of collapse, with Khan’s government facing mounting pressure as rising prices squeeze the middle class that helped carry it to power.
“The demand of jewelry has eroded by 50 percent which has forced about 30-40 percent highly skilled workers to look for other options like selling vegetables, bread etc.,” Mairaj Ahmed Khan, President of the All Pakistan Zargaran Jewelers and Gems Association, told Arab News, with some manufacturers saying they had laid off half their labor force.
“Our business has suffered...because the retailers have no demand. We have reduced about 50 percent of labor because I have no orders. The industry is dying because there is no customer in the market and no demand,” Adnan Qadri, a wholesale jewelry manufacturer, told Arab News.
“The severity is unprecedented,” Majyd Aziz, President of the Employers Federation of Pakistan, told Arab News.
“And those who become the victims of downsizing or layoffs... the chances are rare that they (will) get jobs easily,” he said, adding that despite an overwhelming inflow of job applications, even ideal candidates had to be turned down.


'No food left in the sea': Pakistani fishermen fearful as Chinese trawlers dock at Karachi port 

'No food left in the sea': Pakistani fishermen fearful as Chinese trawlers dock at Karachi port 
Updated 19 October 2020

'No food left in the sea': Pakistani fishermen fearful as Chinese trawlers dock at Karachi port 

'No food left in the sea': Pakistani fishermen fearful as Chinese trawlers dock at Karachi port 
  • Fisherfolk forum says government plan to allow Chinese to carry out deep-sea fishing in territorial waters could render millions jobless 
  • Federal government says bottom trawling will not be allowed under new fishing policy

KARACHI: A pressure group that represents Pakistani fishermen has said a government plan to allow Chinese companies to carry out deep-sea fishing in the country’s territorial waters could threaten the survival of at least three million people who depend on the sea for livelihood.
Last month, 12 Chinese deep-sea trawlers docked at the port of Karachi, unleashing fear among local fishermen who say commercial fishing vessels and bottom-trawling would deplete fish stocks in the exclusive federal sea zones off the Sindh and Balochistan provinces. 
Bottom trawling - dragging nets across the sea floor to scoop up fish - stirs up the sediment lying on the seabed, displaces or harms some marine species, causes pollutants to mix into plankton and move into the food chain and creates harmful algae blooms or oxygen-deficient dead zones.
The coastal line of Sindh and Balochistan is 1,050 km long, Mohammad Ali Shah, Chairman Pakistan Fisherfolk Forum, told Arab News last week, saying around three million fishermen relied on the sea to survive. 
A new fishing policy is expected but yet to be revealed by the government, he said. 
“The deep-sea trawler policy has not yet been approved but before that they [China] have brought these trawlers,” Shah said, calling the arrival of the Chinese vessels at Karachi port last month ‘illegal.’ 

In this undated photo, fishing vessels of Fujian Fishery Company move from the Gwadar port towards Karachi, Pakistan (Photo courtesy: Fishermen Cooperatives Society)

In 2018, the government enacted a deep-sea fishing licensing policy that both fishermen's representative bodies and provincial government bodies opposed, calling it a constitutional violation and an encroachment on the livelihoods of fishermen in the coastal provinces.
Fears about foreign fishing companies eating up local communities are not new.
For years, fishermen in the southwestern city of Gwadar in Balochistan province - a flagship of the $60 billion China-Pakistan Economic Corridor - have protested against foreign trawlers. 
Tensions first began to mount when the Fisheries Department disclosed its plan to issue licenses to various foreign fishing vessels to operate in an exclusive economic zone in 2016.
But last week, the federal minister for maritime affairs, Ali Haider Zaidi, told Arab News the country’s new deep-sea fishing policy would not allow Chinese trawlers to engage in unregulated deep-sea fishing. Bottom trawling, he said, would be banned under the new policy.
“Importing boats is not illegal,” he said. “How you use them has to be regulated.”
Pakistan divides its sea into three zones, where zone-3 (from 20 to 200 nautical miles) is controlled by the federal government. Up to 12 nautical miles (zone-1) is the domain of the provinces Sindh and Balochistan and between 12 to 20 nautical miles the sea is declared a buffer zone. 

Fishermen remove fish from a net at the Clifton beach in Pakistan's port city of Karachi on Oct. 6, 2020. (AFP/File)

Local fishermen are not allowed to fish in zone-3 and foreign fishing vessels are not permitted to fish in the other two zones under the existing policy.
The Fishermen's Cooperative Society (FCS), which issued the permit to the Chinese trawlers, said the Chinese fishing vessels would not use the destructive bottom trawling method and instead help ‘upgrade’ Pakistan’s fishing industry and export.
Official figures put the annual value of Pakistan’s fish exports at roughly $450 million.
“Bringing Chinese trawlers for deep sea fishing is in line with the government’s deep-sea fishing policy and aimed at upgrading and modernizing fishing, besides providing job opportunities to local fishermen,” Abdul Berr, Chairman of the Fishermen's Cooperative Society, told Arab News.
“Around 3,500 fishermen will get employment opportunities with the arrival of the world’s latest fishing boats and modern small boats,” Berr said. 
He added: “First, 70 percent of the staff at trawlers and processing facilities will be local. There will be no fishing in provincial territorial waters. The trawlers will bring all their catch to Karachi where it will be processed in factories and then exported.”
Small local fishermen would receive modern fiber boats on ‘easy instalments,’ Berr said, a step towards replacing their obsolete boats.
But Sindh’s minister for livestock and fisheries, Abdul Bari Pitafi, said the mega fishing ships would wipe out sea-life, even if they were only operating in the federal government’s zone-3.
“We will...also oppose its [trawlers’] operations in zone-3 because they will just wipe out sea-life including the fish’s seed,” Pitafi told Arab News.
In 2016, a survey carried out by the Food and Agriculture Organisation revealed that more than 72 percent of the fish stock in Pakistan’s coastal areas had already declined.
“One trawler does a catch that is equal to a catch by 100 of our fishing boats,” Younus Khaskheli, a fisherman, said. “And their fishing net is the most dangerous one, because it hunts thousands of tons of fish.” 
Tens of thousands of fishing boats are registered in Pakistan, he said, with fishermen from Sindh, Balochistan, Punjab, Khyber Pakhtunkhwa and even Bangladesh fishing in these waters.
“Our sea stock will end; the country will lose the income of billions and our fishermen will become jobless,” Khaskheli said. “There won’t be any food left in the sea.”