ISLAMABAD: A delegation of businessmen met Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh to apprise him of the damage done by the Covid-19-induced economic downturn to large-scale manufacturers.
It was highlighted by the delegation that owing to low demand caused by the coronavirus, the size of balance sheets of large manufacturers was not maintainable. A major factor in that was the massive labour cost, especially in labour-intensive industries like garments manufacturing, the businessmen said.
Any arrangement to avoid permanent worker layoffs or furloughs was putting an excessive strain on the liquidity of businesses, which were anticipating a slow economic recovery, hence hedging against potential insolvency issues, they said.
The delegation head stressed the need for an enhanced role by the government to ease the liquidity crunch faced by large businesses. The need for crafting a scheme for cost-sharing between public and private sectors was also emphasised.
The finance adviser updated the businessmen about the implementation of prime minister’s stimulus package worth Rs1.2 trillion.
The delegation was asked to come up with a precise case for financial support and its parameters as the central bank had already been running a scheme for payroll protection.
Commerce Adviser Abdul Razak Dawood expressed interest in working out the impact of diversion of goods orders by the US from China to other countries, and its potential effect on manufacturers in Pakistan.
Published in The Express Tribune, May 28th, 2020.