M Jahangir Hayat
Pakistan has an enormous unexplored food potential for which Rice and Halal Food are the most appropriate instances. Pakistan has faced worst locust plague in decades which devastated parts of the south west as swarms have ravaged wheat, cotton and vegetable crops. The situation, developed due to coronavirus, has caused a huge loss to the industrial production of various countries therefore Pakistan can give a quantum jump to its export once the circumstances came to normal. The impact of COVID-19 pandemic will be long lasting a large number of employees have been rendered unemployed and in order to contain unemployment we have to open all sector under their SOPs.
The views were shared by Lahore Chamber of Commerce and Industry (LCCI) Senior Vice President Ali Hussam Asghar while exclusively talking to Daily The Business here.
Following are some excerpts from interview:
Q: What is the food potential of Pakistan and how can it be explored?
Ans: Pakistan has an enormous unexplored food potential for which Rice and Halal Food are the most appropriate instances. Currently, Pakistan’s rice exports stands at $2.1 billion which can be increased to $3billion provided supply chain is improved on modern lines, i.e. Rice transplanters can enhance the yield to a double while rice harvesters can save a significant quantity of rice from breakage besides it is also imperative to work on seed technology as Pakistan extra-long range rice variety. Research and Development needs to be conducted like the one India is doing to cultivate extra-long range rice varieties. Hybrid basmati comparatively give good yield per acre. When yield per acre increases cost per acres tend to decrease enabling one to be compatible with competitors. Rice is one of Pakistan’s cash crops and the government needs to work extensively to double the rice output. Pakistan has a tremendous Halal Food potential. Unfortunately, the potential is not be tap properly. Global Halal food market stands at $1 trillion but Pakistan’s total halal food exports share is not more than $200million which needs to be increased. To enhance the halal food export from Pakistan, meat development should be undertaken; poultry is another area requiring Innovations.
Q: What measures have been taken at the Lahore Chamber of Commerce and Industry LCCI levels to enhance halal food exports?
Ans: For the first time we have established halal food standing committee and stake holders were invited for the input. Work was being done in the direction. Unfortunately, COVID-19 breakout wreaks havoc with all settings. However, we are determined to enhance halal food exports and restart the work once the Covid-19 pandemic ends. We will arrange delegations and for this we have taken commercial counselors on-board.
Q: What wrong locust has done to Pakistan and what should the government do?
Ans: Pakistan has faced worst locust plague in decades which devastated parts of the south west as swarms have ravaged wheat, cotton and vegetable crops. The country has battled its worst locust infestation since the 1990s and a swarm earlier this month descended on the port metropolis of Karachi for the first time since the 1960s. Locusts struck first earlier this year, but the United Nations’ Food and Agriculture Organisation has warned a serious threat remains as swarms now start to leave their summer breeding grounds along the India-Pakistan border. The attacks had destroyed up to 40 percent of crops. Wheat, cotton and tomatoes had all been ravaged. The farmers are very worried as they have seen their crops being destroyed in front of their eyes. These farmers should be compensated. Almost all crops and non-crop plants are vulnerable and the insects are one of the biggest threats to food security in large parts of the world.
Q: How has COVID-19 pandemic hit trade and industry? And what the government should do to fix the economy after the pandemic crisis end?
Ans: The government should evolve a comprehensive post-corona economic strategy as the post-corona era would be challenging for the economy of Pakistan. The situation, developed due to coronavirus, has caused a huge loss to the industrial production of various countries therefore Pakistan can give a quantum jump to its export once the circumstances came to normal. The private sector should keep close contacts in Central Asian States, Africa and South America while government should support export-oriented industry through resolving their issues so that it can grab the opportunities in true sense of word. Argentina, Brazil, Peru, Venezuela and Chile do not require introduction in Pakistan if discussed under the subjects of trade, geography, culture and ethnicity etc. But in economic scenario, they carry an inadequate eminence among us. The government and private sector should recognize the importance of these regions and should gear up efforts to strengthen trade and economic ties with these countries. Bilateral discussions should be held between the diplomats and private sectors of these countries whenever it is possible. The trade relations with South America must be touched the core of available opportunities, which are still overlooked or minimally exercised. We are also signing a Memorandum of Understanding (MoU) with Mexico Chamber of Commerce and Industry and will be conducting Zoom meetings to explore trade and industry potential with the South America.
Pakistan has to focus other than the traditional partners to gain more economic benefits and give boost to the national exports. The upcoming global economic shift would be more advantageous for us if we extend its economic associations towards South America that is not a traditional trade destination for Pakistan merchandise.
Q: How will COVID-19 impact the employment rate in the country and what the government should do to tackle the situation?
Ans: Yes, the impact of COVID-19 will be long lasting 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 sectors ensuring the SOPs to be able to overcome the challenging situation. All the stakeholders, including trade organisations, associations and the chambers should be taken on board in this regard. We want the government to discuss with us in adopting a comprehensive strategy for the future.
Q: What is your take on the Federal Budget 2020-21 and how good or bad is it for trade and industry?
Ans: Removal of the reservation of business community Federal Budget 2020-21 will pave way for collective efforts to cope with the ongoing and post-COVID-19 economic challenges. The government has presented a good trade and industry friendly Budget 2020-21 that too in really challenging times when the economy has been adversely hit by the COVID-19 outbreak. Various measures have been taken in the Federal Budget 2020-21 which would have a profound impact on the Economy and Businesses. The business community applauds the government for showing clear intent of promoting industrialization in the country because in the budget, custom duty has been reduced on 40 raw-materials of various industries. Furthermore, the Government has reduced customs duty on 90 tariff lines from 11% to 3% and 0%. The government has also exempted additional custom duties on those tariff lines which are at 0% customs duty. In order to enhance the competitiveness of the Iron and Steel Industry in the country, the government has reduced the regulatory duty from 12.5% and 17.5% to 6% and 11% respectively on Hot Rolled Coils. These measures are in line with LCCI’s Budget proposals and would help in making the local industry more competitive by reducing its input cost. The reduction in Federal Excise Duty on cement from Rs. 2 per kg to Rs. 1.75 per kg will help to boost the construction sector which will be the main source of employment generation in the post-covid economic scenario as more than 40 allied industries are related to the construction industry. The fundamental demand of reduction in sales tax from 17 percent to single digit was not accepted, as not a single percent cut in ST has been proposed in the budget. LCCI had submitted proposals with the federal government, urging it to come up with a relief-focused and tax-free budget in the face of Covid-19, but unfortunately no such announcement in this regard was made. No policy has been announced to reduce the energy cost that is one of the biggest reasons for high input cost. Demands of interest-free loans for registered small businesses and removal of withholding tax and end to advance tax at import stage have not been accepted.
However, reduction in regulatory duty on some smuggling prone items to keep these goods under legal imports is good, regulatory duty on several industrial inputs is also being reduced to reduce cost of doing business, tariff protection for domestic industry by increasing regulatory duty on import of those items which are also locally manufactured, incentivizing soap manufacturing industry by reducing rate of additional customs duty and enhancing scope of concessions available to Special Economic Zones.
Q: Exports play an important role in economic development and growth. Do you see any special measures taken by the government in the Budget to enhance exports?
Ans: Exports are the lifeline of Pakistan’s economy. A strong narrative for enhancing exports has been missing in the Federal Budget 2020-21. The Budget should be export centric, containing strong incentives for our industry to fetch more export revenues. Before the Budget passed by the parliament, major allocations for the formation of testing labs for our export oriented sectors. There should be a special incentive regime for IT and Halal Food sectors as both the sectors can play an instrumental role in enhancing our exports.
Q: How do you see the government’s decision of increasing limit of purchase on CNIC from Rs 50000 to Rs100000?
Ans: The CNIC condition has not been abolished as per the demand of the Business Community. My recommendation is that CNIC conditions should be abolished in the future to facilitate the businesses.
Senior Vice President Mr. Ali Hussam Asghar is a young, dynamic, confident and commercially aware businessman, with profound knowledge and experience in export markets as well as sales in local market. After schooling from Aitchison College Lahore, he attained honours graduate degree in Business Administration and since then is running his own Modern Rice Mills located in Kala Shah Kaku near Lahore. He is also Chief Executive of Ali Commercial Corporation. In a short span of time, Ali Hussam Asghar with his resourceful and proactive market skills touched high levels of export sales of his products to countries like UAE, Qatar, KSA, Iran etc. His effective communication skills, credibility and strong product knowledge of Rice has also created a niche in sales of his product in the local market, HoReCa and retail sector. Since the past 5 years, Ali Hussam Asghar is also involved in serving Trade and Industry by being actively involved in the affairs of Lahore Chamber of Commerce & Industry (LCCI) and Rice Exporters Association of Pakistan. He is the immediate past Senior Vice Chairman of Rice Exporters Association of Pakistan and has also served twice as Convener of Standing Committee on Diplomatic Affairs of Lahore Chamber of Commerce and Industry.