JULY - AUG 2020

TRADE CHRONICLE
Editorial Comments
New shipping policy
Federal Minister for Maritime
Affairs Ali Haider Zaidi and
Adviser to Prime Minister on
Commerce and Investment
Abdul Razak Dawood unveiled
the amended shipping policy
on August 20. It offers tax
incentives, low-cost financing
to attract new investment in
t h e c o u n t r y ' s s h i p p i n g
industry. As an incentive,
Pakistani flag carrying vessels
in the private sector will be
given preference for berthing
at all Pakistani ports.
"This will also help our
fisheries sector that has the
potential of more than $2
billion, but fish and seafood
exports are currently limited
to only $450m annually. This
will eventually help us
enhance the fishing sector to
deep-sea fishing sector," Zaidi
added.
Before the announcement of
these lucrative incentives,
there was no such document
as the National Shipping
Policy of Pakistan that exists.
T h e r e a r e d i f f e r e n t
ordinances, regulations and
policy documents coming
f r o m v a r i o u s s t a t e
departments that culminate
to make the National Shipping
Policy. Pakistan National
S h i p p i n g C o r p o r a t i o n
Regulations came into effect
in 1984, and Pakistan
Merchant Marine Policy was
implemented in 2001, later
the same was amended in
2019.
However, according to the new
policy, shipping companies if
e s t a b l i s h e d , w o u l d b e
exempted from federal taxes
until 2030, and State Bank of
Pakistan will allow the longterm
finance facility (LTFF)
for importing ships and
vessels, which was earlier
available to exporters.
We hope Pakistan's new
shipping policy would reduce
$5 billion freight bill that the
country pays to foreign
companies for transporting
import and export cargoes.
It may be emphasized here the
country nationalized its
industries in the 1970s,
i n c l u d i n g t h e s h i p p i n g
industry by merging all
companies with the Pakistan
N a t i o n a l S h i p p i n g
Corporation (PNSC). That
decision had shaken the
confidence of the private
sector to invest in the
shipping business, experts
believe. It is the need of the
hour to revive this industry
since we lag way behind our
regional competitors like
Bangladesh and India.
T h e s h i p p i n g s e c t o r
stakeholders termed the
policy as a "good initiative"
a n d c a l l e d f o r i t s
implementation in letter and
spirit. We hoped that local
entrepreneurs would view this
as an opportunity and benefit
from it.
A l l P a k i s t a n S h i p p i n g
Association (APSA) has
welcomed the announcement
and suggested that it is
imperative to monitor the
policy in consultation with
the stakeholders for smooth
sailing of system. The
concerned stakeholders were
lobbying for the last three
years for incentives to be
given to the private sector
since entrepreneurs have the
potential to create more
employment opportunities by
attracting the cargo that is
transported by foreign vessels.
Besides, stakeholders rightly
pointed out that instead of
monopolizing the import of
petroleum products through
the state-owned shipping
firm, the government should
invite bids from the private
sector for transportation of
liquid cargoes.
The announcement of a new
shipping policy is a step in the
r i g h t d i r e c t i o n o f P T I
government and we upbeat
that the private sector would
come forward and take the
pride. The offer of various
concessions is fair, but the
essential aspect for the
development of the shipping
industry is the availability of
ship support services such as
w o r k f o r c e , s t o r e s , d r y
docking, dollar accounts and
repairs, etc.
Expert narrates that over the
years, due to the nonavailability
of local shipping,
t h e s e s e r v i c e s h a v e
deteriorated.
If we want to attract ship
owners to Pakistan, these
services must be improved
and match with international
standards.
A combination of incentives
and cost-effective ship
support services will be
difficult to resist for the
prospective ship owners.
How important this new policy
can be gauged that there were
842 ships in India, 347 in
Bangladesh and 40 in Sri
L a n k a , w h i l e P a k i s t a n
managed with only 11 ships.
Even Iran, despite the
prolonged sanctions, had 100
ships, and Pakistan lags
behind.
TRADE CHRONICLE - July .~ Aug. 2020 - Page # 07