Need stressed for finding out solutions to challenges in Pakistan

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Prudent economic decisions in consultation with the stakeholders are need of the hour for finding out sustainable solution of manifold challenges posed to the national economy.

Lahore Chamber of Commerce and Industry (LCCI) Vice President Mian Abuzar Shad stated this while talking to Business Recorder. He said that non-availability of electricity, gas and poor security conditions in parts of country had a big impact on the competitiveness of Pakistani merchandise both in local and foreign markets.

He called for an appropriate energy strategy, implemented by dedicated professionals, to overcome electricity and gas shortages. When asked to comment on widening of tax net, Mian Abuzar Shad said that all the businessmen were in favour of documentation of the economy but the way the new taxation measures are being implemented was against all norms.

Highlighting the ongoing energy crisis, the LCCI Vice President said that both the trade and industry were in deep troubles. The graph of unemployment was going up with every passing day as no new jobs are coming up. The government should announce a package of incentives for the industry in Punjab that is facing closure in the wake of acute shortage of this raw material, he said.

He underlined the need to have a national consensus for the construction of mega water reservoirs. These dams will ensure cheap electricity, food security to all citizens and fundamental rights. Currently, the country was facing dual problem on a very basic level - the alarming power deficit twined with the remarkably high tariff, he said.

The development of consensus within the business community for the construction of the Kalabagh Dam was central to the creation of sustainable economic growth, he added. He also stressed the need for exploration new markets to jack-up export volume. Due focus should also be given to non-traditional items for which Pakistan has sufficient expertise and potential as well. Potential markets include China, Turkey, Central Asian States and African countries. The fact that these locations are invariably in the developing world means that these markets will show healthy growth when developed markets begin contraction is a major asset in the future.

He said that at a point in time when the economy was in dire need of a stimulus package, along the lines of the policy promulgated the world over in response to global recession; the increase in interest rate will countermand economic recovery. The cost of doing business in Pakistan was already highest in the region, a trend which was set to continue, he added.

Mian Abuzar Shad said that the rationalization of the taxation system would also be taken up with concerned authorities. He said that the main objective of the Lahore Chamber of Commerce and Industry was the development of trade and establishment of industry. "All available resources must be utilised for economic development. Right now, all businesses face the impending threat of economic meltdown; none of us can escape the consequences of such a catastrophe."

He said that research was an area, if given due attention could achieve miracles. He said that he would, in active collaboration with fellow businessmen, work towards the promotion of research culture in Pakistan. He emphasised the importance of trade among the regional countries and particularly with the bordering states. We can easily wear off the intensity of global financial threats by increasing our trade in the region. There is no second opinion that a lot of trade is being done via third country that could be easily channelised in the larger interest of one third of world's total population, he said.

About MFN status to India, Mian Abuzar Shad said that the business community is in favour of trade with India but the government would have to satiate the reservation of certain sectors including pharmaceutical and auto sectors. If Pakistani businessmen can cope with Chinese products so there is nothing to worry about India but definitely we need to put our house in order. We must be very strong internally because one's weaknesses expose him to many threats. Bad law and order situation not only hurts local investments but also keeps the foreign investors away. In my opinion it always turns a country into a trading place instead of a manufacturing hub.

The Indian Non-Tariff Barriers (NTBs) are the only hurdle in the way of a smooth bilateral trade between Pakistan and India. While in Pakistan, the Indians reject all sorts of NTBs but actually they are protecting their industry very smartly. Pakistani business community should be provided with a level playing field while doing business with India.

Rising risk perception about investing into Pakistan is hitting hard the Foreign Direct Investment (FDI) that fell sharply in recent months and needs to be tackled through a comprehensive policy approach by involving Chambers of Commerce in the country.

The severest-ever energy shortfall, bad law and order situation, institutional fragility and the political instability were the major factors keeping the foreign investors away. The fall in Foreign Direct Investment was likely to affect adversely the country's economic growth therefore the government should adopt remedial measures to reverse this trend and to attract foreign investment, he said.

Courtesy: Business Recorder

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