Pakistan needs to boost exports to become economic hub in region: LCCI president and Pharmasales Int’l Director Mian Tariq Misbah-ur-Rehman
By Jahangir Hayat
Only exports can make us realise our dream of becoming an economic hub in the region. This very indicator needs to be strengthened. It is being said that exports have increased but I do not think so that our exports have increased. We need to compare orange with orange not orange with apple. Five years ago our exports were standing at $25billion and if they had touched $26billion, I would have no doubt that our exports have increased. But it is not so. We have a huge potential for exportable products. Copper export must be banned while import encouraged. The government should immediately ban the export of copper bars to safeguard the local industry. Copper is one of the most important base metals for use in the engineering sector.
The PTI government has assured the traders and industrialists that there would be no harassment of trade and industry but all is not well. Unfortunately, the same previous practice is the rule of the day. Tax net was promised to be broadened but no new avenues have been explored and the existing taxpayers are being squeezed and harassed.
The above views were shared by LCCI president and Pharmasales International (Pvt) Ltd Director Mian Tariq Misbah-ur-Rehman in an exclusive interview to Daily The Business the other day.
Following are some of the excerpts from the interview:
Mian Tariq Misbah-ur-Rehman: How can anyone be the President of Lahore Chamber of Commerce and Industry LCCI and what benefits can a common businessman avail after becoming a part of the Chamber?
Daily The Business: Yes, last December I became the president of LCCI and that was all due to the top visionary leadership that provided me the opportunity to work for the wellbeing of trade and industry. I am thankful to the seniors of the Founder Group. My journey of LCCI was started 25 year ago. Initially, I was made convener of various standing committees and worked hard for resolving issues of trade and industry. After that I was elected the board member of LCCI. Eight years ago I was made Senior Vice President (SVP) and currently have been elected as the President of the Pakistan’s premier chamber, LCCI. So this was the whole journey of my 25 career in the chamber.
How can any trader and industrialist become the Chamber’s part?
Over 90 percent of the trades and industrialists of Lahore are our members. LCCI membership has made it mandatory to conduct business in various sectors especially, the business of import and exports. On the other hand, those who are not members, they also are welcomed and sooner or later they will also become the Chamber member according to the need of their businesses. Union is strength. When we assemble on a common platform we can resolve many issues of both collective and individual significance. Both traders and industrialists are part and parcels of each other. The LCCI is such a platform that has direct access to the various government departments to resolve trade and industry issues. We have a very nominal annual fee of Rs1000 to Rs1200 for Associate Class members and in exchange of that very fee we have numerous facilities for them as over 25 government departments are holding their booths to immediately resolve issues which normally takes too much time if you go directly to their offices. We have NADRA, WeBOC, PIA, LESCO, FBR, Customs, Passport and many other departments that resolve issues then and there facilitating the business community.
When was the LCCI setup?
LCCI was set up in 1923 before the Partition as the Northern Indian Chamber of Commerce. Its name was changed to West Pakistan Chamber of Commerce and Industry in 1949 and it was again renamed as Lahore Chamber of Commerce and Industry in 1966. Earlier the whole of the Punjab was covered under LCCI and gradually with increasing industrialization across Punjab Sialkot, Sahiwal Gujranwala, Faisalabad and other Chambers were set up. The LCCI enjoys a great historical background as our Presidents have risen to prominence as Commerce ministers and chief ministers. Mian Anjum Nisar is the current president of Federation of Chamber of Commerce and Industry, Iftikhar Ali Malik is current president of SARCC, Mian Misbahur Rehman was a former Commerce Minister and this is also the strength of LCCI.
Traders and Industrialists have been feeding the whole country even then they are on the roads carrying foul. How do you resolve trade and industries’ issues?
This is a very good question. The PTI government has assured the traders and industrialists that there would be no harassment of trade and industry but all is not well. Unfortunately, the same previous practice is the rule of the day. Tax net was promised to be broadened but no new avenues have been explored and the existing taxpayers are being squeezed and harassed. FBR is issuing notices and lodging FIRs on the seasoned businessmen who have been paying huge taxes every year. FBR is issuing notices to the traders and industrialists for tax years of 2009 and 2011 which is no way legal as FBR can never issue notices to the taxpayers for the tax years which does not fall within the ambit of five years.
However, we appreciate that the government had extended much needed relief to the COVID-19 hit trade and industry that put the businessmen at ease. Elimination of electricity peak hour is another landmark decision which must be commended. However, FBR’s notices and other such issues are really thought-provoking and need urgent attention of the authorities.
Which industry do you belong to?
We have been in the pharmaceutical industry since 1960. We have four to five pharmaceutical companies now. My grandfather set up first pharmaceutical and all the today’s well known multinational companies including Glaxo Wellcome and SmithKline Beecham and Novatas were our partners and we brought them to Pakistan. However, now they have installed their own setups with the increasing volumes of their sales. So the main line of our business is pharmaceutical.
What is the name of a well-known product of your company?
Jetepar is a well-known medicine of our company which is used to treat hepatitis. The medicine is exported to Afghanistan and Central Asia.
You are a well-known businessman and have a deep insight in the economic affairs of the Country. How can we become an economic power in the region?
Well, only exports can make us realize our dream of becoming an economic hub in the region. This very indicator needs to be strengthened. It is being said that exports have increased but I do not think so that our exports have increased. We need to compare orange with orange not orange with apple. Five years ago our exports were standing at $25billion and if they had touched $26billion, I would have no doubt that our exports have increased. But it is not so. We have a huge potential for exportable products. I have taken up with the Abdul Razak Dawood Minister of Commerce Abdul Razak Dawood and Federal Minister for Industries and Production Hammad Azhar. Our Engineering Sector has been wonderful at times. Until 1960, we used to export generators and other such goods but the industry was ignored. The Engineering Sector needs prompt attention as the goods that we had been producing in our country, now are being imported. Rice exports can be increased up to $5billion to $7billion provided the government supports the rice exporters. Our Pharmaceutical Sector exports have touched the $1billion mark without any support from the government. Engineering, Rice and Pharmaceutical Sector can easily touch $10billion exports provided the government with due support of the government within two to three years here. Geographically, we have the abundance of opportunities in the shape of Afghanistan and Central Asia. Then CEPC is no less than a blessing for us. We need to enhance our production. However, production cannot be increased with the policies presently in place. Special measures are needed to be taken. We need to reduce cost of production, improve ease of doing business, and reduce duties and taxes on raw materials.
Why do you want a ban on copper export?
Copper export must be banned while import encouraged. The government should immediately ban the export of copper bars to safeguard the local industry. Copper is one of the most important base metals for use in the engineering sector. The small & medium enterprises (SMEs) involved in the engineering sector including electric cables, enamel wire for all kinds of motors/pumps, control panels etc. use copper as raw material for various components. These industries employ thousands of workers and produce value added products that are widely used in industrial, commercial and domestic sectors. Most of the SMEs cannot directly import the metal due to minimum shipment size, lack of access to the international trade network or unavailability of bank trade lines. They primarily depend on the copper extracted from scrap and refined by local furnaces/metal plants. The local copper metal plants and furnaces prefer to export the copper due to export and tax benefits. As exporting the base metal with little value addition is not in the interest of the country, the governments in the past had imposed a duty to discourage its export. However, the influential furnace and metal plant owners have lobbied at FBR and got the ban removed. The export of copper has not only exponentially increased the metal price in the local market but also caused serious shortage of the material. Copper export has severely impacted on the SMEs ability to produce value added products. It does not make economic sense to export a metal extracted from less expensive imported scrap and import copper cathode that attracts much higher premiums. This has an adverse impact on the foreign exchange reserves of the country. It is also against the country’s best interest to export a raw material required for the local value added industry. For this reason, the countries that extract copper from scrap have placed restrictions/ban on its export. Such countries include India, Bangladesh and Sri Lanka. The furnaces working in the copper refining use a lot of energy and also negatively impact our environment. It is therefore not in Pakistan’s best interest to export copper with very little value addition.
What is massage especially for new and upcoming entrepreneurs who want to become successful in business and become LCCI president like you?
Remember, hard-work is the key to success. Education is a must. Luck also plays its part in becoming a successful businessman. Further, only Industrialization can play a vital role in economic growth and development of the country.
Mian Tariq Misbah-ur-Rehman is an old Aitchisonian and Ravian. He completed his BBA from USA. He has a rich family business history in the field of pharmaceutical manufacturing and distribution for over 50 years. He is the director of Pharmasales International (Pvt) Ltd, involved in distribution and marketing of medicines. He is also Director of Popular Chemical Works (Pvt) Ltd, a pharmaceutical manufacturing unit. Popular Chemical Works (Pvt) Ltd. has business collaborations with RottaPharm, Milan, Italy (now part of Mylan Group) and Servier Research & Pharmaceuticals, Gidy, France. Other business concerns include Crystalline Ampoule Works (Pvt) Ltd., a fully automated Glass Ampoule Manufacturing Unit and Nazir Agriculture Farms-involved in Farming & Orchards. Mian Tariq Misbah-ur-Rehman has served as: • Former Senior Vice President of the Lahore Chamber of Commerce & Industry in 2013-14. • Former President of Sheikhpura Chamber of Commerce & Industry in 2007 • Former Executive Committee Member of the Lahore Chamber of Commerce & Industry in 2011-2012. • Former Executive Committee Member of the Lahore Chamber of Commerce & Industry in 2009-2010. • Former Board Member LESCO • Former Board Member of Punjab Industrial Estate Management (PIE) Govt. Punjab. • Former President Sheikhpura Vocational Training Council (Govt). of Punjab. • Former Member Regional & Central Committees of Pakistan Pharmaceutical Manufacturers Association (PPMA) • Former Vice-Chairman of Standing Committee on Pharmaceutical of the Lahore Chamber of Commerce & Industry • Former Convener of Standing Committee of Diplomatic, Foreign Missions and Embassy liaison. • Former Board Member Skill Development Board Govt. of Punjab