Smartphone manufacturing grinds to a halt in Pakistan as plants run out of raw material — industrialists

A shopkeeper deals with customer at his mobile shop in Islamabad, Pakistan, on May 20, 2022. (AFP/File)
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Updated 21 February 2023
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Smartphone manufacturing grinds to a halt in Pakistan as plants run out of raw material — industrialists

  • With only $3.1 billion forex reserves, Pakistan has restricted imports to stop the outflow of dollars
  • Commercial banks have delayed or denied opening LCs for imports, leading to closure of many industries

KARACHI: The manufacturing of smartphone devices in Pakistan has ground to a halt after manufacturers ran out of raw material, industrialists said on Tuesday, amid a restriction by the South Asian country on several imports due to falling foreign exchange reserves.   

Left with only $3.1 billion foreign exchange reserves, Pakistan has restricted imports to stop the outflow of dollars as it struggles to stave off a balance-of-payment crisis.  

Commercial banks have delayed or denied opening the letters of credit (LCs) for the import of goods, including industrial raw materials, leading to the closure of many industries.  

“Smartphone manufacturing has come to a halt after manufacturers ran out of parts by the mid of February and shut down their factories,” Aamir Allawala, vice-chairman of the Pakistan Mobile Phone Manufacturers Association (PMPMA), told Arab News on Tuesday. 

Allawala, who described the situation as “very painful,” said the monthly import bill of those running smartphone production plants amounted to nearly $170 million. 

The government had agreed to halve the amount for the import of raw material under the current situation, but that was not being materialized, he added.  

“Dollar requirement of mobile phone manufacturers is $170 million per month but for two months, January and February, no LC has been opened despite the government’s assurance to release $83 million,” Allawala said. 

Arab News made multiple attempts, but could not reach Pakistan Information Technology and Telecom Minister Aminul Haque for a comment on the matter. 

The South Asian nation, which used to be a net importer of mobile phones prior to 2016, started producing feature phones in 2016 and smartphones in 2019. 

In 2022, local production of phones stood at 21.94 million handsets as compared to the import of 1.53 million devices, according to the Pakistan Telecommunication Authority (PTA).   

Around 29 mobile phone assembling plants exist in Pakistan that mainly import smartphone parts from China, South Korea and Vietnam.   

In May last year, the South Asian country, grappling with economic woes, had imposed a ban on the import of luxury items to save the greenback for the import of essential commodities, including food and energy.  

The government, however, allowed imports in later months, but restricted the flow of trade.   

“We were already operating at 40 percent capacity since May 2022 but the situation has forced us to completely shut down the plants which we did last week,” Abdul Wahab, a director at an Infinix mobile phone assembling facility, told Arab News.   

“We were producing 300,000 handsets per month but now the production has dropped to zero with supply chain completely dried out.” 

Allawala said smartphone manufacturing was a labor-intensive industry and had employed around 40,000 skilled and unskilled workers. A majority of the workforce had been laid off or was in the process, he added.   

Allawala, whose company manufactures Techno mobile phones in Pakistan, said Chinese experts working at the facility had returned, while their investment was at stake due to the current situation.    

“There were 12 Chinese managers working at our facility, but now 10 have left for China due to the current situation,” Allawala said. “The state of the economy has also disappointed investors.”  

He said the country had the potential to export mobile phone worth $13 billion and it could be materialized by making Pakistan a manufacturing hub.   

The Mobile Device Manufacturing Policy 2020 set a 49 percent localization target by June 2023, including 10 percent localization of parts of the motherboard and 10 percent localization of batteries.   

Allawala said manufacturers were eyeing localization of parts and exports from the country, but “I am not sure how these objectives would be achieved under the current circumstances.”    

Pakistan’s mobile phone imports witnessed a massive decline of 67.3 percent to $414.8 million from July 2022 till January 2023 as compared to $1.27 billion of the same period the previous year, according to the Pakistan Bureau of Statistics. 


A rocket launcher shell accidentally explodes at a home in southern Pakistan and 8 people are dead

Updated 10 sec ago
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A rocket launcher shell accidentally explodes at a home in southern Pakistan and 8 people are dead

  • Police believe family members took unexploded shell home after finding it at nearby farm
  • City of Kandhkot where the explosion took place is known as hideout of robbers and criminals 

KARACHI: A shell of a rocket launcher apparently accidentally exploded at a home in a remote village in southern Pakistan on Wednesday, killing at least eight people, including women and children, police said.

At least two people were also wounded in the blast in southern Sindh province, said regional police chief Rahil Khoso.

Investigators believe that family members took the unexploded shell home after finding it at a nearby open farm field. Such blasts often happen when people try to dismantle unexploded ammunition to sell as scrap metal.

The city of Kandhkot, where the explosion took place, is known as a hideout of robbers and criminals who are well armed, including with rockets. Security forces have launched operations against criminals in the area.


Pakistani cabbies struggle to stay on the road as fuel costs hack pay

Updated 16 min 5 sec ago
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Pakistani cabbies struggle to stay on the road as fuel costs hack pay

  • On Sept. 15, Pakistan announced a record rise in petrol and diesel prices, second big increase in two weeks
  • Spiraling fuel costs and inflation have left Islamabad cab drivers with reduced incomes, no alternative means of livelihood

ISLAMABAD: Khairullah Khan, a 50-year-old taxi driver, remembers a time when he could fill his tank with cheap fuel to drive passengers across the Pakistani capital and take home enough money for food, drink and a decent life for his wife and nine children. 

Today, spiraling fuel costs and soaring inflation mean he is left at the end of a busy day with less than a few dollars in earnings. 

Last week, parked under a tree near a bustling market in Islamabad, Khan waited for customers but said rising fuel costs had driven most of his clients away.

On Sept. 15, Pakistan announced a record rise in petrol and diesel prices — by 26.02 rupees to 331.38 rupees a liter and by 17.34 rupees to 329.18 rupees a liter, respectively — the second big increase in two weeks for the South Asian nation already struggling with high inflation. A $3 billion loan program, approved by the International Monetary Fund (IMF) in July, averted a sovereign debt default in Pakistan but reforms linked to the bailout have fueled annual inflation running at 27.4 percent.

“We have no work, no income, we are ready to kill ourselves,” Khan, who has been plying the streets of Islamabad since 1991, told Arab News. “It has become very difficult to make ends meet now.” 

Khairullah Khan, a 50-year-old taxi driver, is pictured sitting in a roadside cafe in Islamabad, Pakistan on September 19, 2023. (AN photo)

Khan complained that customers were now unwilling to pay the high cost of rides that drivers were forced to charge due to new fuel prices.

“When we raise the fares, people argue that they are not responsible for the fuel prices so why should they pay higher costs,” the cabbie said.

Yellow cab driver Talib Hussain, 47, said now even “middle class people” could not afford taxi rides.

“I have not had any customers since morning, neither have any other cabbies standing here,” he said, pointing to a line of cabs behind his car.

Hussain said he used to make almost Rs25,000 ($85.6) per month last year but now took home barely Rs 8-10,000 ($27-34) monthly.

“If we [family] were eating thrice a day [last year], now we can only afford to eat one meal per day. Earlier my kids used to go to school by a van but now they have to walk to school every day. I have enrolled them in a government school because I could not afford to pay for private schools.”

An employee waits for customers at a fuel station in Islamabad, Pakistan on September 25, 2023. (AN photo)

Many drivers who work with ride hailing apps like Uber, Careem, Bykea and InDrive reported a 50-60 percent decrease in average income compared to last year.

“The way fuel prices have increased, the rates per kilometer have not been increased the same way [by the ride-hailing company] which has resulted in a 50-60 percent drop in our incomes,” part time cabbie Naveed Alam said.

“If I was saving Rs 1,000 ($3.42) per day from this work last year, now I can barely save Rs600 ($2) … Customers have decreased, and fuel prices have doubled, which has reduced our income manifold.”

An InDrive bike rider who only identified himself by his first name, Usman, said he earned Rs1,000 ($3.42) per ride last year while burning Rs200 ($0.68) on fuel.

“Now for the same job, the fuel costs us around Rs 500-600 ($2),” he said, adding that maintenance costs for his bike had also doubled. “The fuel costs have almost doubled, and inflation has also increased so much, which has made our lives very difficult.”

Many cab drivers said the price hikes were forcing them to seek alternative means of livelihood, an uphil task, or get a second job.

“We toil for over 18 hours a day, yet we are unable to cover our expenses,” said Vilayat Khan, a cab driver in Islamabad who has been associated with the profession for the last 28 years. “But to start any other work we need investment, but we don’t have any money to invest, we don’t even own the cars we are driving.”

Bykea motorcycle driver Haider Ali Bykea said he saw no silver lining in the clouds:

“People like us will be forced to end our lives … what else can we do? I have five kids, how do I feed them? How is a poor man supposed to survive?”


Punjab health minister says lack of ‘informed consent’ led to blindness caused by experimental drug

Updated 27 September 2023
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Punjab health minister says lack of ‘informed consent’ led to blindness caused by experimental drug

  • Nearly 70 patients of diabetes across the province suffered vision loss after being administered Avastin medicine
  • The drug is primarily used to treat cancer but is also prescribed for diabetic retinopathy-related edema in Pakistan

ISLAMABAD: Punjab’s interim health minister Dr. Javed Akram announced on Tuesday an experimental medication suspected of causing vision loss among dozens of diabetics across the province was administered by hospitals without following proper procedures that included obtaining “informed consent” from patients.

Nearly 70 individuals from various districts in Punjab reported eye infections leading to blindness in recent weeks after receiving injections of Avastin. The medication is primarily used to treat cancer but is also prescribed off-label in Pakistan for diabetic retinopathy-related edema.

Pakistan imposed a temporary ban on the drug earlier this week after patients began losing their vision and initiated an inquiry to assign responsibility.

In a media briefing in Lahore, the provincial health minister said the off-label use of any medication required prior authorization from the Drug Regulatory Authority of Pakistan (DRAP).

“This did not happen,” he clarified. “Moreover, the good clinical practice of securing informed consent [from patients in such cases] was also not followed.”

Dr. Akram emphasized that it was mandatory to seek a patient’s consent “in the local language when administering an experimental drug.”

He disclosed that the government had now decided to require audiovisual recordings from hospital authorities, demonstrating that patients had been clearly informed of the benefits and risks associated with off-label medication use.

The minister reiterated the government’s commitment to bringing those responsible for this criminal negligence to justice and confirmed that Avastin would be available only for cancer treatment while the inquiry continued.


Minister says Pakistan to finalize first artificial intelligence policy by December

Updated 27 September 2023
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Minister says Pakistan to finalize first artificial intelligence policy by December

  • The information technology minister says it is important to help people develop AI skills since they are quite valuable
  • The government is setting up a policy committee of experts from IT industry and academia to finalize the draft policy

ISLAMABAD: Pakistan’s interim information technology minister Umar Saif said on Tuesday his team had prepared the draft of the National Artificial Intelligence Policy and was currently in consultation with relevant stakeholders to finalize it by December.
Artificial intelligence, often abbreviated as AI, refers to the development of computer systems that can perform tasks typically requiring human intelligence. These tasks include learning from data, recognizing patterns, making decisions, and solving problems. AI aims to create machines that can mimic human-like thinking and decision-making processes.
With this technology becoming more readily accessible, governments and private sectors across the world are beginning to reap its benefit while performing day-to-day functions. Pakistan’s planning ministry also acknowledged in April the AI incorporation in different government sectors would lead to better decision-making processes, personalized medical treatments, and enhanced learning experiences and solutions that were previously unattainable.
“There are far reaching consequences of this policy,” the information minister told Arab News in a brief conversation. “We have put it for public consultation. There is a draft which helped us get public comments from outside as well as inside the country … We need to train people to develop AI skills according to the policy since they can be quite valuable.”
“My goal is to finalize and notify this AI policy by December,” he continued.
Syed Junaid Imam, the spokesperson for the information technology ministry, also informed Arab News the country’s official artificial intelligence would be finalized after consultation with all stakeholders before being sent to the federal cabinet for approval.
“It is based on four main points,” he said while sharing details. “Enabling AI through awareness and readiness, AI market enablement, building a progressive and trusted environment, and its transformation and evolution.”
A recent notification by the information ministry said it was “forming a policy committee that will lead the policy consultation process and finalize the draft,” adding that the members of the committee would have experts from industry, academia and the government.
“The National AI Policy is crafted to focus on the equitable distribution of opportunity and its responsible use, having the defining attributes such as evidence-based and target oriented, user-centric and forward-looking, objective and overarching,” according to the draft of the policy, a copy of which was seen by the Arab News.
The draft also outlined how Pakistan would collaborate with other countries to share best practices and expertise in the AI field.
“The policy proposed the establishment of an AI regulatory directorate that ensures the ethical and responsible use of AI,” it read.
The draft policy also addressed the potential job displacement that could result from the global proliferation of the new technology.
“AI can help to promote economic growth by encouraging investment in AI research and development which can lead to the creation of new jobs and industries, as well as improved productivity and efficiency,” it said.
It further stated that owing to the impact of artificial globally, the Pakistani government envisioned embracing it by appreciating human intelligence and stimulating a hybrid intelligence ecosystem for equitable, responsible and transparent AI use.


Russia confirms delivery of first LPG shipment to Pakistan via Iran in expanded energy ties

Updated 27 September 2023
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Russia confirms delivery of first LPG shipment to Pakistan via Iran in expanded energy ties

  • Pakistan imported 100,000 tons of discounted Russian oil under a government-to-government arrangement in Juna
  • Consultations on second LPG shipment are underway after the first was routed through Iran’s Special Economic Zone

KARACHI: In a move marking an expansion of energy ties between the two countries, the Russian diplomatic mission in Islamabad confirmed the delivery of 100,000 metric tons of liquefied petroleum gas (LPG) to Pakistan through Iran on Tuesday.
The delivery follows an earlier government-to-government (G2G) deal that saw Pakistan import 100,000 tons of discounted Russian crude oil on June 11, which prompted former Prime Minister Shehbaz Sharif to describe it as a “transformative day” for the economically struggling South Asian nation.
The LPG shipment, announced by the Russian embassy in a social media post, comes as Pakistan seeks to diversify its energy portfolio with more affordable options.
“Russia has delivered the first batch of liquefied petroleum gas (LPG) in the amount of 100 thousand metric tons to Pakistan through Iran’s Sarakhs Special Economic Zone,” it said on messaging platform X, formerly known as Twitter. “Consultations on the second shipment are underway.”

Pakistan has already started blending Russian oil with imported crude from the Gulf markets.
Zahid Mir, a top official at Pakistan Oil Refinery, told Arab News last month that the Russian crude had been successfully processed by the country, adding that the spot deal with Moscow was both technically and commercially viable.
He also informed negotiations for further cargo imports were underway.
Pakistan plans to import about 20 percent of its crude oil from Russia at discounted rates to meet its growing energy demand.
It meets about 43 percent of its LPG requirement, with a total annual consumption of 4,600 metric tons, through local production, according to data compiled by the Petroleum Club of Pakistan.
Pakistani officials could not be approached for comments on the story.