Pakistan Will Reduce Tariff on Bearings to 10%
The first budget of the democratically elected government of Pakistan, which assumed office in November 2002, includes a wide range of economic reforms. The speech on the new Federal Budget delivered by Federal Finance Minister Shaukat Aziz promises to eliminate, "inconsistency in economic management."
Among these reforms are tariff reductions designed to address major problems with smuggling-prone items. In particular, bearings have been a favorite of smugglers, due to their value and the ease they can be sold without a trace once inside the country. The new budget reduces bearing tariffs to only 10%, applied equally to all types of bearings
No official figures were offered regarding the amount or percentage of bearings which are being smuggled into the country.
While smuggling is the economic backbone of many areas in Pakistan, its border with China in particular is a well-known route for bearings. Pakistan also shares borders with India and Iran, which have complained that counterfeit brand-name bearings from China are being smuggled into their countries via Pakistan.
The Pakistani government has had some limited success with other products by reducing customs tariffs, eliminating the economic incentive for smugglers. It hopes the same experience will hold true in the coming year, beginning July 2003, when the tariffs fall to 10%.
Over the past year, the economy of Pakistan has shown remarkable improvement; currency stability has returned, economic growth has been more than 5%, and inflation held at 3.3%.
Minister Aziz said, "We must show maturity and prudence, without which a strong nation cannot be built. We plan to make a new beginning in this country. A beginning of economic stability, continuity, certainty, and long-term thinking and planning."