M Jahangir Hayat
The government must have to move strategically and with utmost care to get advantages of these opportunities and there is no reason we cannot re-emerge as an economic power after the COVID-19 pandemic. Like so many other countries of the world COVID-19 pandemic has also hit hard Pakistani economy hard. Pakistan’s economy has suffered $18-20 billion losses to the COVID-19 pandemic and lockdown. In order to strengthen the economy and to cover the losses we have to open business places systematically under the SOPs. As a first step, Pakistan should declared amnesty for industrial sector like the one real-estate sector has been extended.
LCCI president Mian Zahid Jawaid Ahmad expressed these view while talking to Daily The Business and shared his insight about the COVID19 pandemic and the lockdown. Following are some excerpts from the interview:
TB: How is COVID-19 and lockdown going to impact trade and industry of Pakistan?
MZJA: Like so many other countries of the world COVID-19 pandemic has also hit hard Pakistani economy hard. The businesses at all levels have to be closed, export orders were cancelled, imports halted, Small and Medium Entrepreneurs (SMEs) and traders told to reduce or completely close their outlets. Pakistan was already struggling to put the economy on track and then suddenly COVID-19 erupted in China due to which our business with China nosedived. After that Pakistan’s business with the European Union was hit as the pandemic was imported to the region and then comes the US. Worse was that the pandemic took to its roots in Pakistan during March played havoc with the remaining trade and Industry activities in the country. Naturally, the government has to take measures to save lives of the people and it did do that wonderfully well. So this way both foreign as well as local trade and Industry were hit by the pandemic. According to a rough estimate Pakistan’s economy has suffered $18-20 billion losses to the COVID-19 pandemic and lockdown.
How will we be able to recover the losses?
Ans: We are with the government during COVID-19 lockdowns but we also have to take up the economy on priority basis for survival. In order to strengthen the economy and to cover the losses we have to open business places systematically under the SOPs. SOPs should be made for the sectors to open them. The COVID-19 is such a dangerous virus that has killed thousands and left millions affected. Life is a precious thing that should be taken care of in every case. Recovery of these losses is tough but not impossible. Where there is crisis there are opportunities as well. True, there are crisis but there are opportunities. Oil crisis of the big nation is a blessing in disguise for the undeveloped world. The $12 billion immediate payments have been deferred while $1.4 billion have been approved for Pakistan as an aid while debt servicing has also been deferred. Then there is a significant reduction in policy rate. All these are the underlying opportunities. However, the must have to move strategically and with utmost care to get advantages of these opportunities and there is no reason we cannot re-emerge as an economic power after the COVID-19 pandemic.
What should the government do in the present crisis?
Ans: As a first step Pakistan should declared amnesty for industrial sector like the real estate sector have been extended. Following the large scale industrialization there would be abundance of exports with Pakistan. Further, the government should not charge interest on loans for two to three months minimum, payments of utility bills should also be differed upto 50 percent for 2 to 3 months so the entrepreneurs could restart their business by not being affected by the shortage of cash and capital.
One the other hand, the government should also disburse interest free soft loans to the SMEs and small traders enabling them to restart. This is very obvious that capital money with them has been spent on day-to-day needs during the lockdown.
For example, Bangladesh has introduced a wonderful bailout package where they will pay all the wages and utilities for the next three months and the mill owners will be repaying the loans to the banks in two years. The State Bank of Pakistan (SBP) has introduced loans on 4 to 5 percent markup rate but that is not feasible in the prevailing situation. The loans should be disbursed on zero percent interest rates if the government wants to revive the economy besides every kind of investment either it white or gray should be allowed as people do not have capital money. All that money must be allowed to pour in to the system at least for the upcoming two years enabling the money to circulate into the system strengthening the economy.
The government has taken a very good step for the construction industry where it has been announced that the investors in construction would not be questioned about their investment. In similar manners the government should not ask for the money trail and let the people do business freely.
Why are the Port and Shipping companies not following direction of the government for extending free days and defying orders of government?
Ans: In order to save the import business the private terminal should be bounded to waive off demurrages and detentions charges at least during the times when whole the world is fighting battle of survival.
The government should take stern action against the shipping companies that are not obeying the order. It is the times industrial and commercial importers are face hard times and they must be given relief.
We are cognizant of the fact that the shipping companies are minting money in the difficult times which is not good. We persuaded Federal Board of Revenue in this regard and the board has directed them to further increase 15 free days but most of the shipping companies are defying the directions. It is not understandable as to why the companies are not action upon on the direction. On the other hand, these shipping companies have allowed free time to India while in case of Pakistan they are reluctant to do that. However, we are continuously persuading the issue and hope that it will be addressed soon.
Do you have any committee or cell in LCCI that is collecting facts and figures about the losses in trade and industry during the crisis?
Ans: Well, LCCI research and Development which is making reports on daily basis. The facts and figures are being maintained on regular basis about the trade and industry. All the collected facts and figures are being regularly communicated to both federal as well as the provincial government enabling the government to be able better understand the crisis and take the measure in accordance with the requirements. LCCI has been working on how to open the economy and the papers we have prepared will be shared with government. We need to take big decision in the current situation and if we don’t take these hard decision things will move from bad to worse that we cannot afford.
What should be the strategy to cope with the pandemic and it immediate impact especially the rising unemployment in the country?
Ans: Well, the impact of COVID-19 will go a long way as a large number of employees have been rendered unemployed and in order to contain unemployment we have to open all the sector under their SOPs and if we don’t do that unemployment will shoot up which will trigger criminal activities and the situation will be difficult to control by the government and it is therefore, the government should start opening various sector ensuring the SOPs to be able to overcome the challenging situation. All the stakeholders including trade organization, association and the chambers should be taken on board in this regard. We want the government to discuss with us to make a comprehensive strategy for the future.
Lahore Chamber of Commerce and Industry (LCCI) Vice- President Mian Zahid Jawaid Ahmad did his MBA from the University of the Punjab in 1974 after graduation from the Government College University, Lahore in 1971. That was the first batch of MBAs from the University of the Punjab and he did his specialisation in Finance.
He has a vast experience in the field of finance, trade and manufacturing. He started his career by assuming the post of financial analyst with NIT Karachi in 1975. He had also worked with Saudi Basic Industries Corporation (SABIC), the largest Company of Saudi Arabia
for 11 years as a financial analyst from 1977 to 1987.
After coming back to Pakistan in 1987, he started a large steel pipe manufacturing unit, i.e. Imperial Pipe Mills at Bhai Pheru and the project was successfully completed. Then Zahid took the initiative of launching his own private business with the name of Computer Technologies at Liberty Market, Lahore.
At present, he is running a franchised departmental store, Bareeze at Liberty Market and also engaged in construction business.
Zahid has been serving the business community of Lahore firstly as President of Liberty Market Traders Association and presently as Chairman of Liberty Market Traders Association. Owing to his relentless efforts the beautification & development project of Liberty Market was completed and that’s why the market has become one of the most beautiful markets of Asia.
He was appointed Convener LCCI Standing Committee on Large Industries during 2007 and 2008 and then the Convener Standing Committee on Foreign Investment and Privatisation during 2008-09. Since then he has been
handling the same standing Committee, Foreign Investment and Privatisation. He has already served the Lahore Chamber as an Executive Committee Member from 2009 to 2011.