KARACHI: Chairman of National Business Group Pakistan and President Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain has said the recently announced industrial package by the Prime Minister Imran Khan was a welcome move, but it is insufficient.
The move is likely to increase investment, accelerate the process of industrial expansion, help introduce new technologies, and result in up-gradation and revitalization of closed industries, he said.
Mian Zahid Hussain said the decision of the government will help increase productivity, exports and employment, but the investment may not increase as expected.
He said the package could be unacceptable to the IMF, while the FATF could also express its concerns over it. The government has announced tax cuts and exemptions for local Pakistanis and those living abroad, but this is a violation of the agreement with the IMF, which wants Pakistan to abolish tax exemptions and subsidies for various sectors.
Similarly, the IMF also has objections to such schemes in which the source of income of the investor should not be questioned as the international lending body considers it as deprivation of the rights of honest investors.
Mian Zahid Hussain further said that due to lack of industrialization in the country, exports are declining, imports are increasing and unemployment is on the rise.
For decades, capital has been flowing to the non-productive sectors, leaving productive sectors in a lurch. The country is facing inflation while it experiences a balance of crisis every two or three years, requiring borrowing from the IMF and other lenders, resulting in a cut in developmental.
He noted that the country cannot get out of its problems without giving top priority to the manufacturing sector and for that it has to make many other decisions including cheaper energy and reduced taxes.
The government must improve the overall investment climate, introduce legal, regulatory and other reforms, and reduce the role of bureaucracy.
Without such reforms, industrialization in the country would be impossible, which is a reason that the Chinese industries are not relocating to Pakistan but to far-flung countries.
Local and foreign investors will keep on neglecting Pakistan due to a lack of better industrial environment, he said.
Copyright Business Recorder, 2022