KARACHI: Overseas Chamber of Commerce and Industry's (OCCI) survey has revealed that Pakistan's overall economy has shown positive response with manufacturing sector on bullish trend during last six months.
Businesses across Pakistan have communicated a minor (1%) decline in business confidence at the start of the year 2014 mainly due to rising cost of doing business, energy crisis and deteriorating security environment. During last survey in August 2013, OCCI business confidence index (BCI) was at 2 percent, said the report.
The report was presented by President OCCI, Asad S. Jafar and OCCI's Chief Executive and Secretary General M. Abdul Aleem at a press conference here at the Chamber on Tuesday.
OCCI's President said the survey at random has been conducted throughout the country by an independent survey agency to ensure its credibility. It has covered 80 percent of Gross Domestic Product (GDP) of the country, and covered 43 % manufacturing sector, 30% services sector and 25 % retail sector.
The chamber has been conducting the surveys since 2010 to ascertain the current state of economic affairs of the country and the future expectations, he said.
Asad S. Jafar quoting the survey findings mentioned that business confidence index remains in positive territory for the second consecutive survey with more businesses hinting at expanding capacity and planning new investments as well as seeking to increase the work force.
However, the businesses have also pointed out critical issues that need to be addressed. The confidence had picked up strongly in 2013 after smooth political transition and the expected reforms program of the new PML (N) government.
OCCI's Secretary General M. Abdul Aleem informed the media that when the chamber started survey in 2019 , the business confidence response was minus 47 % and the tendency continued till the present government took over.
Elaborating sector-wise performance during last six months period of the survey, he said that the manufacturing sector posted stronger confidence than retail and services sector. Manufacturing surged to 12% in March 2014 vs 4% in August 2013.
The services sector confidence index dipped to negative 3% in March 2014 against 5% in August 2013. The retail sector has lagged behind and posted the sharpest decline as confidence index has gone down to negative 15% in March 2014 against minus 6% in August 2013.
OCCI's Secretary General M. Abdul Aleem said that the different steps taken by government including paying out circular debt to improve supply of electricity and hike in power tariffs to reduce subsidy - energy crisis, it seems, have not eased a vast majority of business entities.
Deteriorating law and order environment led as the second biggest deterrent of business confidence (47% in March 2014 against 42% in August 2013). In particular street crimes, kidnapping and terrorism incidents have increased alarmingly over the last few years negatively impacting business and investments, it said.
The most surprising part of the survey has to be the fact that these obstacles to doing business have become a much bigger issue in 2014 with 39% of firms declaring it as the top problem faced by their business.
The report said the new federal and provincial governments could come up to the high expectations that they would improve governance and transparency. Secretary General OCCI, M. Abdul Aleem said that business confidence is positive but borderline, hence, offers great opportunity to provincial and federal governments to capitalize the positive vibes by ensuring improved business environment in the country.
He said that federal and provincial governments are responsible for decline in business confidence index and all these should take possible step for ensuring business friendly environment in the country.
They should improve governance, bring up policies and processes to cope with present economic challenges, introduce strict accountability measures at the highest level, ensure regular interaction with business chambers and private sector in general, control the cost of doing business and work seriously on capacity building in government departments.
" OCCI has submitted comprehensive taxation proposals to the government such as settlement of all sales and income tax refunds within 30 days, increasing tax-GDP ratio but the honest taxpayers be lessen tax burden, to reduce corporate tax rate and document the economy to broaden the tax base," said Aleem.
OCCI's Secretary General said that better implementation of existing policies and removal of all kinds of irritants in smooth functioning of businesses is a crucial issue.
Comments
Comments are closed.