Pakistan bans import of luxury items to boost economy
Islamabad, Pakistan – Pakistan’s new government on Thursday said it would ban the import of over 30 luxury items including cars and fruit jams in an austerity move to help boost the country's faltering economy.
Cash-strapped Pakistan has been hit by a storm of crippling debt, dwindling foreign currency reserves and galloping inflation.
The national currency hit a historic low on Thursday, with 200 rupees fetching US$1.
"My decision to ban (the) import of luxury items will save the country precious foreign exchange," Prime Minister Shehbaz Sharif tweeted.
The move was an effort to target the country's elite, with the banned goods including mobile phones and cars – which make up the largest share of import bills on the list – as well as cosmetics and jams.
"We will be able to save US$6bn by imposing a ban on import of the luxury items," information minister Marriyum Aurangzeb said at a press conference, adding that the ban would be effective immediately.
"The decision will give a boost to the local economy and industry".
However, business leaders said the country must seek consent from the World Trade Organization, which regulates international trade.
"I think it is a prudent step by the government… it would help save much needed foreign exchange to pay off our international trade debts," said Khalid Tawab, the former senior vice president of the Pakistan Chamber of Commerce.
"The government has not declared a financial emergency yet, but that is the situation we are facing, and so under such circumstances the WTO could be persuaded to relax its rules."
Pakistan's current trade deficit stands at US$39.2bn.