AFTER a number of failed beginnings, the ECC has finally approved an auto policy that could kick-start a round of fresh investments in this vital sector which has seen a large boom in the past year.
The new policy aims to break the years’ long pattern of wrestling between the government and the auto giants, by providing incentives for fresh entrants to come into the market.
Since the late 1980s, Pakistan’s auto sector has been dominated by three assemblers, who have had to be pushed into making investments to localise the manufacture of components and spares, keep prices competitive, maintain output to keep pace with demand, and introduce new models on a regular basis.
The auto makers have their own point of view in all this, particularly of late when they claim, with merit to their case, that a large and growing cash economy has turned new cars into a speculative product, creating a secondary market of sorts where ‘own’ money dominates.
The government has done the right thing to emphasise on new entrants in the market above anything else. This is the best way to inject some fresh energy into the auto sector where booming sales are catching the eyes of other manufacturers.
The sector could use some healthy competition, and the policy pursued by previous government since the expiration of the last auto policy in 2012 to promote competition by encouraging imports of used cars, was counterproductive.
A stable horizon for the next five years in terms of tariffs applicable to the new entrants and imported cars will do more to encourage investment than ad hoc changes in the tariffs of used cars.
Ad hoc moves of the sort that have been used since 2012 have hurt investment and introduced distortions in the behaviour of auto makers.
The new policy gives them a stable environment, and even though they are likely to make a fuss about the preferential treatment that new entrants will be given, at least they will know that their comfort zone is about to be disrupted.
Hopefully, this will spur a little more energy in the sector, which is sitting on massive cash reserves ready to invest, as pointed out by the State Bank at the start of the week.
Now that a policy has been announced, and competition may well be on the horizon, they have every reason to invest rather than hoard their cash.
Published in Dawn, March 19th, 2016
BEIRUT: The co-leader of a Kurdish-Arab political alliance in Syria has condemned a decision by the country’s Kurdish-controlled northern regions to seek autonomy, demonstrating that opposition to the move exists even among the Kurds’ closest allies.
The three northern regions agreed at a conference on Thursday to establish a self-administered “federal democratic system of Rojava - Northern Syria”. Rojava is the Kurdish name for north Syria.
The Damascus government and neighbouring Turkey swiftly condemned the move, as did Washington which fears it could complicate UN-backed peace talks in Geneva.
Haytham Manaa, who is co-chairman of the Syrian Democratic Council (SDC) along with Kurdish activist Ilham Ahmed, said on Friday the move was inappropriate.
“We reject this one-sided initiative and ask them to retract it and work within the framework of the SDC,” said Manaa, who spoke on behalf of his political grouping, the Qamah Movement, a central group within the SDC.
The SDC, which groups Kurds, Arabs and others, was formed in December at a meeting in northeastern Syria with the stated aim of promoting a secular, democratic vision for the country.
The Syrian Kurdish PYD party is part of the SDC and, along with Arab, Assyrian, Turkmen and other groups in the north, was a key proponent of the process that led to Thursday’s declaration of a federal system.
“One party within the SDC
(the PYD) undertook this initiative separately,” said Manaa, adding that the regional declaration contravened the aims of the SDC.
Published in Dawn, March 19th, 2016
