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Rs 3b PSDP funds may go to quake reconstruction

* Humayun seeks textile exporters’ help in rehabilitation projects

Staff Report

KARACHI: The government is looking towards textile exporters to share 50 percent funds needed for the reconstruction and rehabilitation projects being carried out after the October 8 massive earthquake in Azad Jammu Kashmir and northern parts of the country.

"The government really needs you support," Commerce Minister Humayun Akhtar Khan told members of the All Pakistan Textile Mills Association (APTMA) at a meeting here on Thursday.

"The textile industry has made good money in the past five years and it’s time to play due role as the country is going through its worst crisis in its history,” he said.

He also warned that the next budget would not offer any significant relief to export-oriented industry in terms of project financing and focus more on rehabilitation of the quake-hit areas and people.

"The quake would ultimately affect the budget estimates," he added. "I think some Rs 2 billion to Rs 3 billion would be diverted from the PSDP (public sector development programme) to the post-quake activities' funds."

The October 8 earthquake, which measured 7.6 on the Richter scale, killed over 80,000 people and left around 3.5 million homeless. Most deaths were in the Himalayan region of Kashmir and northern parts of the country where snowfall has already begun at some places.

However, the government and international donors have yet to reach consensus on total losses caused by the earthquake and funds needed for reconstruction projects.

"I have brought you the message of President General Pervez Musharraf and Prime Minister Shaukat Aziz to play your role in time of such disaster," said the minister.

He said the government was interacting with international donor agencies, but it was focusing more on generating funds through local resources.

However, APTMA -- the biggest and the richest trade body of the country -- is not ready to trust the authorities.

"More participation to donate funds is not an issue as such," said Lieutenant-General Ali Kuli Khan (retd), APTMA Chairman, in response to the minister's request. "But I am sorry to say whether you term it wrong or right the fact is that our members doubt the proper utilisation of these funds and have reservations over transparency of the whole process."

He said APTMA had contributed a total of Rs 200 million for the earthquake relief efforts and its members individually donated huge amounts, and also set up of relief camps in earthquake-hit areas.

Earlier, the minister said Pakistan’s exports to the European countries would be treated under the generalised system of preference (GSP) from January 2006, which offered duty reduction on various products.

"We have not been offered GSP plus status, but still under GSP our products would get a 20 percent duty relief," said Mr Khan. "Leather manufactures and exporters of such goods in particular would have a good opportunity to capitalise on such opening."

He said despite rising competition, textile exports had registered a significant jump in the past first quarter of the fiscal and was expected to maintain the same trend this fiscal.

The country's exports rose 34.68 percent on year in September, whereas imports climbed 68.62 percent in the same period, which widened the trade deficit from a year ago, said the data compiled by the Federal Bureau of Statistics.

The bureau said exports totalled $1.499 billion in September 2005, up from $1.113 billion in the year-ago month whereas the exports totalled $1.408 billion in August 2005.

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