Unfavourable economic conditions

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Unfavourable economic conditions: 30 percent of small, cottage industries shut down in 2010

KARACHI : Unfavourable economic conditions in the city drove at least 30 percent of small and cottage industry to a permanent closure during 2010, traders said on Thursday. Besides, poor law and order situation inflicted over Rs 2 billion losses on small traders due to frequent market closures in the wake of spontaneous violence in the metropolis during the entire year, they added. They blamed a number of issues responsible for affecting the city s 70 percent businesses during the current calendar year, terming 2010 a Year of Turmoil for them. Investments in fresh businesses could not reach even 5 percent in the small and cottage industry sector, they said, adding imports of different items produced locally primarily paved the path for small traders financial collapse. Worse law and order situation, soaring inflation, besides shrinking purchasing power of people drove the existing businesses towards downsizing, Chairman All Karachi Tajir Ittehad, (AKTI) Muhammad Atiq Mir told Business Recorder on Thursday. He said the year 2010 had proved volatile with rising poverty level and deteriorating law and order situation, which eventually left 70 percent of existing businesses badly affected. Traders this year have suffered loss of over Rs 2 billion due to various reasons particularly repeated businesses closures in the wake of law and order situation in the metropolis, he added. He pointed out that over 80 percent of traders could not return bank s loans on time, while 0. 4 million had quit businesses because of lack of finances to continue their already fragile set-ups. He said lack of conducive trade and business environment phenomenally reduced 60 percent of production of small manufacturing units and pushed 40 percent businesses towards losses. At least 30 percent small manufacturing units have closed so far in the wake of persistent uncertain financial conditions of the country, Atiq Mir said. He pointed out over 0. 2 million daily wagers in the city were compelled to beg to feed their families, saying the rising unemployment were yielding crimes, which was an alarming sign for the nation. Atiq Mir said, at least 150 traders have been killed and over 70 shops have been torched in different violent incidents during 2010, adding extortion in markets continued to mar businesses. He expressed fear that traders are likely to make their businesses smaller due to lack of government support and increasing violence in the city.

Courtesy : Business Recorder


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