On Thursday, the Government of Pakistan bans import of Luxury items and non-essential goods of more than 30 luxury items, including cars and fruit jams, to boost the country’s fragile economy.
Financially troubled Pakistan is hit by a crash of declining debt, declining foreign exchange, and inflation.
The national currency dropped historically on Thursday, with 200 rupees fetching $ 1.
“My decision to ban (import) luxury goods will save the country valuable foreign currency,” Prime Minister Shehbaz Sharif said on Twitter.
The move was an attempt to look at the country’s top people, as well as banned goods including cell phones and cars – which make up the bulk of the foreign debts on the list – as well as cosmetics and jam.
“We will be able to save $ 6 billion by enacting a ban on the purchase of luxury goods,” Information Minister Marriumum Aurangzeb said at a press conference, adding that the ban would be implemented soon.
“The decision by Pakistan ban import of luxury items will boost the local economy and industry.”
However, business leaders say the country should seek the approval of the World Trade Organization (WHO).
“I think it is a wise move for the government … it can help save much-needed foreign exchange to pay off our foreign exchange debt,” said Khalid Tawab, former vice-president of the Pakistan Chamber of Commerce.
“The government has not yet declared a financial emergency, but that is the situation we are facing, so under such circumstances, the WTO can be persuaded to relax its rules.”
Pakistan’s trade deficit currently stands at $ 39.2 billion.
Former leader Imran Khan was ousted in a no-confidence vote last month, mainly over a failure to reverse the rising cost of living and the cost of essentials.
The announcement comes as Pakistani officials are locked in talks with the IMF in the Qatari capital Doha over the withdrawal of funds as part of an agreed loan program.
The $ 6 billion IMF bail package signed by former prime minister Imran Khan in 2019 has never been fully utilized because his government withdrew from agreements to cut or terminate certain grants and improve income and tax collection.
Islamabad has so far received $ 3 billion, with plans to be completed by the end of this year.
Officials are demanding the extension of the program until June 2023, with the release of the next $ 1 billion phase.
At the core of the deal is likely to be an expensive subsidy – especially fuel and electricity – and Finance Minister Miftah Ismail has said he wants both sides to “find a middle ground”.
Aurangzeb said as a result of this, it was decided to ban the importation of all non-essential luxury items. “These items are the ones that can be used by the public,” he said as he identified foreign vehicles as one of them.
The decision comes as the dollar has seen a meteoric rise compared to the rupee over the past few weeks due to rising domestic purchasing debt, growing account shortages, and declining foreign exchange reserves. On Thursday, the dollar broke all records and rose to Rs200 in the banking market.
At a press conference, the information minister confirmed to the country that Prime Minister Shehbaz was “working around the clock to stabilize the economy”.
List Pakistan bans import of Luxury items
- Mobile phones
- Home appliances
- Fruits and dry fruits (except from Afghanistan)
- Private weapons and ammunition
- Chandeliers and lighting (except energy savers)
- Headphones and loudspeakers
- Doors and window frames
- Traveling bags and suitcases
- Sanitary ware
- Fish and frozen fish
- Carpets (except from Afghanistan)
- Preserved fruits
- Tissue paper
- Luxury mattresses and sleeping bags
- Jams and jelly
- Heaters, blowers
- Aerated water
- Frozen meat
- Ice cream
- Shaving goods
- Luxury leather apparel
- Musical instruments
- Salon items like hair dryers etc
Reasons Pakistan Bans Import of Luxury Items
She declared that it was “an emergency state of affairs” and Pakistanis might have to make sacrifices underneath the economic plan, including that the effect of those bans could be around $6 billion.
She stated that import orders where the letter of credit score had already been opened or wherein payments were made would be processed but no more modern ones would be entertained.
“We are able to ought to reduce our dependency on imports,” she said, including that the government is now focusing on exports. The minister said that under the authorities’s monetary plan, neighborhood industries might prosper even as employment possibilities might also arise.
She stated the brand new measures would additionally have an impact on the modern account deficit, including that this step had been taken under an “emergency financial plan”. She said that a meeting could also be held later nowadays on how to reduce the effect of power charges on consumers.
Criticizing the PTI-led former government, Aurangzeb stated that former high minister Imran Khan had placed all the instances against his personal regime on the back burner. She held the PTI government responsible for the exponential upward push in inflation and for committing “financial terrorism”.
Rejecting the PTI’s non-stop calls for conducting early elections, the minister asserted that the authorities and its allies might make a selection on this regard, no longer the other manner round. “it is our choice while to preserve elections […] in case you supposed to keep elections, you will have accomplished so before the no-trust motion turned into submitted.”
“We’ve got the ability and experience to restore the current economic issues. The step taken to ban imported objects is geared toward stabilizing the economy.”
Responding to a question, the minister additionally stated that PM Shehbaz might cope with the nation in an afternoon or “explain the complete scenario”.
‘Measures could be inconsequential’
“millions of traders and shopkeepers could be tormented by these steps and it’ll additionally have an effect on bilateral change,” he said on Twitter, adding that it would additionally contribute to an upward push in smuggling.