In an effort to curb the escalating import bill, the Pakistan government has decided to slap a ban on the import of at least 50 luxury items.
The decision comes in the wake of crisis management efforts being made by the Shehbaz Sharif-led coalition government to get Pakistan out of the worsening economic crisis and stabilise its currency, which has been on a free fall in the recent days.
The luxury items include cars, mobile phones, cheese, jam, frozen food items, fish, dried fruit, cosmetics and tyres, among others.
The decision is part of the bold and unpopular decisions the coalition government has opted for in view of the increasing pressure after the Imran Khan government was ousted from power and Shehbaz Sharif formed a coalition government with a promise to get Pakistan out of the economic crisis.
It should be noted that Pakistan is going through its worst economic crisis as Pakistani rupee continues to be on a free fall against the US dollar in both the currency markets.
Experts say the market reaction is because of the uncertainty in terms of political scenes and the negotiations with the International Monetary Fund (IMF), adding that clarity in these scenarios will help stabilise foreign reserves and will also bring stability to the currency.
As per the latest decision to slash imports of luxury items, Prime Minister Sharif has also directed the Ministry of Industries and Engineering Development Board to convince the automakers to slash imports of completely knocked down (CKD) and semi knocked down (SKD) cars.
The decision to impose the ban is linked to the approval of the World Trade Organization (WTO) and the International Monetary Fund (IMF). It has been decided that the IMF will be consulted on the ban during the ongoing negotiations in Doha, after which the federal cabinet approval will be sought to amend the import policy.
“We will have to follow a procedure to move ahead with the imposition of the ban on import of 50 luxury items. The WTO allows imposition of ban if its member country faces balance of payment crisis. But this ban can be imposed for a few months period only,” said a government source with knowledge of the matter.
“The government has estimated that the banning of luxury items in the range of 50 to 60 products could save at least $250 million on monthly basis,” the source added.