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Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,777
1024hr
Pakistan Cases
1,287,161
33624hr
0.78% positivity
Sindh
476,830
Punjab
443,519
Balochistan
33,507
Islamabad
107,930
KPK
180,383

LAHORE: The Businessmen Panel (BP) will revamp the Federation of Pakistan Chambers of Commerce and Industry on the pattern of Federation of Indian Chambers of Commerce after winning the elections, said FPCCI’s Businessmen Panel presidential candidate Irfan Iqbal Sheikh while talking to Business Recorder.

Sheikh said that he will work hard to make FPCCI a National Advisory Body on industry and trade to assist the government on economic issues. “We will make FPCCI a voice of Pak business and industry”. Terming the multi-billion-dollar China Pakistan Economic Corridor project pivotal to accelerating Pakistan’s economic development and regional prosperity, Irfan observed that the expeditious completion of the CPEC projects should be the foremost priority of the government.

He also said that several countries have shown keen interest in the development of infrastructure projects and industrial units under the umbrella of CPEC. There was an acute power shortage in 2013 due to which the country was suffering almost 2.5 GDP losses. To meet the country’s requirements of power, addition of 17,000 MW of electricity was envisaged under CPEC. He said that it is the time of market cultivation and to sort out major bottlenecks to economic and social development which needed to be addressed to boost economic growth. He said that it is good that the energy projects of 5300MW worth $13 billion have already been established under CPEC.

He said 135 Chinese companies were operating in Pakistan on CPEC and other projects and the top priority should now be to revive the confidence of those working on CPEC. It is appreciable that almost 20 projects worth $16 billion were completed, including 10 power projects of over 5,000MW and HVDC transmission line amounting to $9.5 billion, five infrastructure projects of around $6 billion, two projects relating to Gwadar Port and Free Zone, and City Master Plan amounting to $300 million, four Social Economic Development amounting to $140 million. A total of 30 projects worth $9.5 billion are under implementation and 35 projects of around $29 billion are under consideration, which needs to be speeded up.

Irfan Iqbal Sheikh, who is also an LCCI former president asked the government to focus on Special Economic Zones (SEZs) which are necessary to attract foreign investment, as medium-term projects have to be ready by 2025. It is the time of expansion and development and balanced regional economic development, processing and manufacturing industries can bring improvements in the country’s progress. He said development at Gwadar Port should have been faster as it is not up to the expectations, as there is neither electricity nor water in Gwadar while a 300MW coal-fired project has not yet been established as per plan.

The $64 billion CPEC, signed in 2014, aims to connect China’s strategically important northwestern Xinjiang province to the Gwadar port, through a network of roads, railways, and pipelines to transport cargo, oil, and gas. Both the countries have already agreed that the implementation of the second phase of the China-Pakistan FTA with a view to enhance trade, economic and investment opportunities between the two countries.

Irfan Iqbal Sheikh, the BMP’s presidential candidate for the FPCCI’s upcoming elections, said that after the Corona devastation, Pakistan should take advantage of those export orders cancelled by the other regional countries. For this, the government will have to reduce the production cost of the industries to avail this offer by the international buyers.

Irfan Iqbal, the former LCCI president, said that the central bank should announce an initiative related to loans for Small and Medium Enterprises (SMEs), as the SME sector has to show collateral to banks, which are always reluctant to offer them concessional credit. He suggests that banks should provide loans to SMEs on six percent. He termed the 8.75% key policy rate as very high, especially in the extraordinary prospects, suggesting to promote the present growth pace further in the industrial and service sectors through lowering of mark-up rate, as the economy is on track, with stability on external and domestic fronts. He said that the banking sector should also take measures to strengthen SMEs to stimulate the growth of trade and industry in the country as SMEs are considered the engine of economic growth.

He cited the example of Taiwan, Korea, Brazil, China and Turkey, who have been concentrating their efforts in developing the SME sector. He further said that SBP should initiate special schemes and come up with growth-oriented policies to support the trade and industry.

Talking on the issue of the Point of Sale (POS) system Irfan said that the business community is against the government’s decision of collecting tax from traders on the basis of the size of their business establishment(s) and installing POS system which he said was another way to charge double tax.

Irfan Iqbal called for establishing a high–tech testing lab to boost exports and reduce the cost of doing business in the province. The government should also introduce a simple lease policy to reduce the cost of land. The government should focus on encouraging the development of IT parks as there is no institution to solve the problems of the service sector, which makes 60 percent of Punjab’s economy.

Irfan Iqbal stressed the need of reducing the cost of doing business, besides developing a new price control mechanism, as inflation has broken records over the last three years. Food prices had doubled due to high taxes, rising oil prices and a persistent jump in electricity and gas tariffs, adding that the record-high inflation was already denting the industries’ productivity amid local currency devaluation.

He was of the view that the absolute dependence on borrowing had devastated the economy.

The cost of production had hiked significantly due to higher taxes and increased utility tariffs, which rendered Pakistani exports uncompetitive in the global market, he added.

The country was facing “stagflation” because economic growth was slow while unemployment and prices of goods and services were high, he added.

Irfan Iqbal asked the government to take measures to bring down the cost of agriculture production, prioritizing the agriculture sector in its economic planning to ensure food security through enhanced per acre yield. Lack of investment in agriculture research, poor governance, bad planning and climate change has already resulted in a shortage of wheat, sugar and cotton. As a result, the import bill of cotton has increased substantially owing to record low production.

Iqbal said that country’s population has reached 222.1 million with a growth rate of 1.9 and further expansion is expected in near future despite an 11.5 percent increase in cultivated land along with 187 percent increase in production of wheat, 171 percent in cotton production and 162 percent increase in sugarcane production during the last 45 years.

In these circumstances, he suggested the government reduce the cost of production through direct support to farmers in the purchase of machinery, fertilizers, pesticides and other inputs, while infrastructure should also be developed to ensure farm-to-market access. The government should formulate a sustainable agriculture policy to ensure food security in the country, he added.

Irfan said Pakistan’s Construction Sector has a massive potential to uplift the economy. The sector can engage a large number of both skilled and unskilled workers – thus solving the issue of unemployment along with generating revenue for the country, which will uplift the overall economy of the country

The construction sector provides stimulus to almost 42 sub-sectors including brick, cement, cables, fixtures, glass, aluminum, wood, paint, tiles, transportation and warehousing. However, the peril is that despite knowing the construction sector’s huge potential, this sector’s total contribution to the GDP is slightly over 2% as compared to 9% for other regional economies such as UAE.

PM Imran Khan also said that promotion of tourism in the country is one of his government’s top priorities to generate revenue and job opportunities.

He further said that Pakistan’s information technology sector has the potential to increase its exports as the industry grew significantly by around 40% during the fiscal year 2020-21.

Copyright Business Recorder, 2021

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