Business community pins high hopes on PTI Govt: Malik Tahir Javaid
PML-N fails miserably in resolving long-standing issues of traders, industrialists in five years: LCCI President
By M J Hayat
AHORE: The Pakistan Tehreek-e-Insaf (PTI)-led government seems more efficient in its working and the business community has attached its high hopes with the government for economic revival. The previous government of PML-N has failed miserably in resolving the long-standing issues of the business community during its five-year tenure.
The resolution to the community’s grievances has become utmost important for the economic health of the country.
Lahore Chamber of Commerce and Industry (LCCI) President Malik Tahir Javaid expressed these views in an exclusive interview with Daily The Business.
High cost of energy is a prime concern of the industrial sector which is combating various internal and external challenges. Pakistan’s worst ranking in ease of doing business is clearly indicating that how many obstacles are being faced by the industry.
“Pakistan is ranked 147 among 190 economies in the ease of doing business. The rank of Pakistan deteriorated to 147 in 2017 from 144 in 2016. New Zealand, Singapore, Denmark, South Korea, Hong Kong, USA, UK, Norway, Georgia and Sweden are leading from front in ease of doing business index while Pakistan is lagging behind from the countries
like Mozambique, Grenada, Mali and Nigeria”, Malik Tahir Javaid said and added that energy is the major raw material for the manufacturing sector and its high prices are one of the biggest reasons for country’s deteriorating ranking in ease of doing business.
Welcoming the action taken by the Supreme of Pakistan on water issues and Kalabagh dam termed it a ray of hope for Pakistani nation.
The LCCI President Malik Tahir Javaid said that the Supreme Court of Pakistan has translated the wishes of over 200 million people and agriculture sector of Pakistan. In this regard, a campaign has been launched by the LCCI as well.
Malik Tahir Javaid said that perhaps Pakistan is the only country around the globe where important water and power projects are being opposed that is unfortunate. Indian water aggression and our failure in building new water reservoirs have thrown country into the list of
water-starved countries. He said that those are guilty of the nation who are opposing Kalabagh dam as research reports have warned that Pakistan will reach absolute water scarcity by the year 2025 if water reservoirs are not built.
The LCCI President said that perceptions against Kalabagh dam are totally wrong and actually are a move to safeguard the interests of the enemies of Pakistan. He said that Kalabagh Dam would be equally beneficial for all provinces. Actually delay in construction of Kalabagh dam is the one and only reason of water shortage in Sindh and other parts of the country. He said that water supply to Sindh was averaged 36.6 million acre feet annually before construction of Mangla and Terbala dams. This supply was enhanced to 40.30 million acre feet after building of these dams. He said that Kalabagh dam will also supply over four million acre feet additional water to Sindh.
The LCCI president said that the Lahore Chamber of Commerce & Industry had already feared that water crisis would hit the agriculture sector of the country due to lack of sufficient water storage facilities while water storage capacity in Terbela and Mangla dams has
considerably gone down. Therefore, Kalabagh dam is a must for the country.
“It would be better if anti-Kalabagh elements play role for early construction of this mega project instead of fueling the provincial conflict otherwise our future generations would suffer” Malik Tahir Javaid added.
The LCCI President said that the Kalabagh dam is inevitable for the progress and prosperity of the country as it will produce power at an average cost of Rs.2/kwh. This cheap power will annually displace costly power worth approximately Rs300 billion with consequential
savings of costly oil imports.
He said that there was no threat to Nowshehra city as it is 150 feet above the water level. He said that Kalabagh Dam, was not only beneficial to Punjab alone but it would be more helpful in erasing poverty from Sindh, Balochistan and Khyber Pakhtoonkhwa. The dam would irrigate 800,000 acres of land that is located 100-150 feet above the Indus river level in the province. He said this land could only be brought under cultivation if the river level is raised that is only possible if Kalabagh Dam is built. He said the other alternative is to pump the water which is very costly.
While talking about rule of law, LCCI President Malik Tahir Javaid said that economy and law and order are linked with each other. Bad law and order situation pressurizes the economy and shatters the confidence of local and foreign investors.
He suggested that seminars should be organized in collaboration with Police Department to make the members of business community aware of different kind of security threats and prepare them as to how they may combat with any unforeseen situation.
Talking about economic diplomacy The LCCI President said that Pakistan cannot remain in isolation in the present economic arena where all countries are working hard to contribute heavily and to get maximum share in the international trade. He said that China, United States,
Germany, Japan, South Korea, France, Italy, Hong Kong, UK and Canada are the top ten exporters while Pakistan is far behind despite having one of the best geographical locations, ideal coastline, ports and all kinds of resources.
He said that economic diplomacy should be a high priority of the government.
In answer to a question he said that early revival of Public Sector Enterprises (PSEs) will be one of the top priorities of the government as these white elephants are eating up a major part of budgetary amount.
He said that collective loss of Public Sector Enterprises has reached to Rs.1.2 trillion. A developing country, which is carrying heavy load of over $ 90 billion of external debts and various other economic challenges, cannot afford to spend such a huge amount on these
Public Sector Enterprises (PSEs) in Pakistan are strategic assets of the country and have the ability to lead economic growth but instead these are inefficient and causing huge loss to the national exchequer, he said, adding that the significance of PSEs cannot be ignored, in view of the fact that they remain the most employment-intensive and capital-intensive organisations.
He said that experts and economists should be consulted for new strategy and methodologies to give momentum to the falling Public Sector Enterprises.
He said that PSEs of Pakistan should continue to remain the backbone of the economy and therefore their revival is critical to our economic survival. He said that it is all the more necessary for the government to increase its efforts for revival of the PSEs. Greater autonomy and non-interference in their functioning have to be guaranteed so that the country can fully reap full the benefits of PSEs. He said that PSEs are not only industries for short-term economic and commercial gains but are our national assets.
To a query, the facility of Open Account for all importers, Javaid said that State Bank of Pakistan introduced open account facility for the importers in 2017 to promote international trade, under which the condition for submission of the original shipping/transport documents
to authorized dealer by the importers was terminated. It was a great favour to the importers but now the open account facility has been withdrawn by the State Bank of Pakistan for some importers without any solid reason.
He said that now it is mandatory to submit the original shipping/transport documents to the authorised dealer by the importers that will cost precious time and capital. Apart from this, the process of monitoring of imports and related payments will be weakened in Pakistan and due to payments through different banks; there will be a risk of more than once payments on a single import consignment.
Due to these issues the exporters would also be affected as various raw materials are being imported for manufacturing of goods. He urged the State Bank of Pakistan to look into the matter and restore open account facility for all importers while keeping the consequences of its suspension in the mind.
Slamming the closure of Engineering Development Board (EDB) he said that the government should restore the entity in the larger interests of the industrial sector, he stated, adding Engineering Development Board is essential for the industry and Business community is unable to understand that for whom government has taken this decision.
He said that the government has taken this decision without taking the stakeholders on board. “Engineering Development Board was playing a fundamental role in promotion of engineering sector and its closure would worsen the things.
“EDB was established to oversee multiple areas related to the engineering sector. An important area where EDB has contributed the most is the Automobile Sector. It oversees the implementation of the Auto Policy, based on predefined policy document guidelines”, Malik
Tahir Javaid said and added that it supports the vendor industry by handling various SRO’s, by assuring local content enhancement and curtailment of rollback, based on the government’s policy guidelines.
He recommended that decision to close down EDB should be taken back immediately as it would give a bad message to the foreign investors.
Closure of an important institution is not a solution to the problems and the government should take corrective to overcome the loopholes.
He was of the view that Pakistani economy is inching towards point of no return due to disturbing interference of International Monetary Fund (IMF) in the Pakistani economy therefore people sitting on the helm of affairs must revisit economic policies.
“I had identified 25 sectors to overcome trade deficit. I am working day in and day out to help jack-up exports and curtail imports”, the LCCI President Malik Tahir Javaid said.
He said that industry is the main victim of deepening economic crisis. Rupee devaluation is adding to the economic miseries of the country and all these ills produced just because of awful interference of IMF in the Pakistan’s economic matters and dictations to the policy makers
for taking harsh measures.
LCCI president said that Pakistan is the “most frequent customer” of IMF and Pakistani governments often depended on borrowing from IMF and accepted stringent conditions despite the fact that this institution is merciless money lender which always forced Pakistan to adopt bad
policies like rupee devaluation, massive increases in the electricity and gas prices.
“How a country can take independent decisions and grow its economy when it is carrying the burden of over $85 billion debt and utilizing huge part of the federal budget for debt servicing”, the LCCI President questioned.
He said that Pakistan would be loser in many heads if immediate measures are not taken to get rid of the massive loans which are the mother of most of the economic ills. He said that though it is a tough but not impossible task as if Turkey can do it than why we cannot.
He said that country faced various economic challenges in last year including decline in exports and foreign direct investment, lowest tax-to-GDP ratio and inefficiency of Public Sector Entities but these challenged can be coped with meaningful partnership and dialogues between the government and the private sector.
While giving the formula for economic independence, he said there are a number of issues that must be tackled on priority, the biggest one is how to keep the momentum of growth in the wake of a less than targeted growth of the agriculture and the manufacturing sector. The second one is the widening gap between exports and imports that could be contained by enhancing exports.
He held that that the government would also have to focus on agriculture, manufacturing sector, education, water, human resources, minerals, public health, tax collection system and end of corruption should be focused to get rid of economic worries.
The LCCI president said that the agriculture is the largest sector of Pakistan as around 43 percent labour was dependent on the agriculture.
“This largest sector needs revolutionary reforms on war-footing. Growth of agriculture sector would not only ensure food security and provision of raw material to the largest export-oriented textile industry but would also generate huge revenue for the government and vast employment opportunities,” he highlighted adding that country’s population is growing at the rate of 2.10 percent every year and if this growth continues for next two decades, population would cross the
mark of 240 million.
He said Pakistan needs to increase the yield per acre on steady pace, therefore the government should plan to bring that about nine million hectors of fertile land under cultivation which is remained useless just because of shortage of water.
He also stressed the need for developing regional, product specific and target oriented marketing strategy. New markets and new products need to be explored to reduce country’s dependence on few commodities and countries. Pakistan’s exports are highly concentrated on a few items. Such concentration on few markets can also become a source for instability in export earnings. Trade Development Authority of Pakistan (TDAP) should be revamped and private sector representation should be there so that the exports could be increased, he suggested.
While concluding the LCCI President said that under one roof the facility desks of NADRA, Traffic Police, LESCO, FBR, SMEDA and Excise and Taxation at LCCI is one of the landmark achievements of the incumbent management and the facilitation has put the business community at ease saving their precious time which is money. The Lahore Chamber of Commerce and Industry upcoming officer-bearers should continue to provide modern and latest facilities to its members.