The threat of an economic downturn jeopardises 40,000 jobs in Pakistan’s mobile phone industry, which has been performing well thus far.
According to industry insiders, the situation is very different from early 2013, when the mobile industry was in jeopardy.
This is due to the fact that mobile phone assemblers are unable to open enough letters of credit (LCs) to meet their raw material requirements.
Domestic assemblers were granted a $80 million quota for the import of completely knocked-down (CKD) parts used to assemble mobile phones. Closed assembly lines could result in the loss of 40,000 jobs in this industry.
According to Syed Aminul Haque, Federal Minister for Information Technology and Telecommunications, Pakistan’s assembly plants will produce 19.7 million smartphones and smart devices by 2022. These devices are estimated to be worth around Rs. 9.7 billion.
According to Aamir Allawala, CEO of Tecno Pack, the domestic demand for mobile phones is estimated to be 36,000,000 per year.
This equates to 3,000,000 per month on average, and includes 1.4 million smartphones.
He emphasised that the data was collected between April and May 2022, when there was no market disruption. Later, the inability to obtain foreign currency caused the disruption.
According to the CEO, as of January 2022, they had 2,750 employees. However,
Now only 1,000 are left as we can carry on with the situation for only a few more days. How far can we continue to employ these employees without doing business?
He was of the opinion that foreign direct investment (FDI) could assist Pakistan in reducing its trade deficit.
We can create joint ventures with Chinese investors and companies, who are keen to invest in the country
To accomplish this, the country must resolve current political uncertainty and create a favourable environment for foreign investors.
Foreign investors, according to Allawala, are discouraged by policy changes and changes in the political setup. He suggested that they wait until the dust settled before proceeding.
Investors can visit any country with a population as large as Pakistan’s, which has more than 220,000,000 people.
He noted that “We have overcome two major challenges, ie law, and order as well as energy shortages in the past decade and we can do this again.”
He emphasised that Pakistan could attract more FDI if its political climate and policies were improved. To protect the legal rights of foreign investors, “we should also provide a separate legal system.”
The CEO also proposed that foreign investors be subject to a separate tax system, as is the case in other countries around the world.
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