LAHORE: The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has asked the government to focus on national economic agenda, giving priority to address the issues of trade and industry in consultation with the business community which is the key stakeholder.
Pakistan, with all its resources and opportunities, cannot afford to continue to muddle through economically due to political polarization.
FPCCI former president and Businessmen Panel (BMP) Chairman Mian Anjum Nisar observed that Pakistan requires a political consensus on economic policy. Freeing the country from its economic calamities should not be a matter of party affiliation, but a common task for all political actors who want to see Pakistan flourish.
There is a dire need for a functioning economic strategy, and for continuity in its implementation, and protecting it from political meddling. He said that Pakistan’s economy is working, but only for its elite. Sustained, rapid, and equitable economic growth has remained elusive due to policy distortions that serve its selective sectors and classes.
Mian Anjum Nisar said that the business community is the key stakeholder to run the economy and the government should finalize the upcoming federal budget in consultation with major chambers and other trade bodies. He maintained that only solution that can steer Pakistan out of the crisis is indigenous with few basic elements, including making all economic policies in consultation with real stakeholders of the economy; simplification & broadening of the tax base instead of squeezing the existing tax payers; encouragement of remittances through bridging the gap between banking channels and open markets and protecting the assets of overseas Pakistanis in the country; incentivizing industry and export substitution.
The FPCCI former president said that Pakistan was in dire need of boosting trade and industrial activities in order to achieve early revival of economy and stressed that the government should bring down policy interest rate to single digit in the next budget that would pave way for availability of low cost credit to the private sector and accelerate the pace of industrialization and investment in the country.
He said that 17 percent GST was a major factor for high cost of doing business and hike in inflation for the common man; therefore, he urged that the government should bring down GST to single digit level in the upcoming budget in order to reduce the production cost and decrease inflation in the country. It would also make our exports more competitive in the international market.
Mina Anjum Nisar said that Pakistan was mostly relying on raw materials and agro based commodities for exports while there was a great need to focus on production of value added products for achieving a great boost in exports. For this purpose, the government should allow duty free import of industrial machinery, equipment and technology so that our industrial sector could upgrade itself to produce value added and hi-tech products for exports. He said that the government should also consider providing incentive package to all major industries on the pattern of construction that would bring a new industrial revolution in the country. He said that the government should also reduce taxes and duties to promote investment in all sectors along with cutting duties on luxury goods.
He said that Pakistan has tremendous potential to improve its economy by promoting the tourism sector. He stressed that in the next budget, the government should allow duty free import for all paraphernalia for the development of tourism related projects including tiles, lights, electrical, mechanical & IT equipment in addition to machinery and all tourism projects. He emphasized that the government should announce at least a 5-10 year tax holiday along with various other incentives for investment in the tourism industry.
Mian Anjum emphasized that the government’s economic and financial team needs to understand that the IMF program is not going to materialize before the upcoming budget, which is only three weeks away. He urged the government to prepare the budget accordingly and make necessary adjustments within this short period.
He assessed that reform is a long-term process but Pakistan must make use of this shock period to redistribute allocations toward social protection and incentivize greater productivity. Delay is not an option. In the coming years, Pakistan’s challenges will only deepen due to climate change and rapid population growth. Pakistan is already one of the world’s 10 most populous countries and it will remain among those ranks as its population surges over the coming decades.
Pakistan needs a path toward sustained, rapid, and equitable economic growth that incorporates its fast-growing population into the labor market. But Pakistan is a net energy importer with a narrow export base. Periods of economic expansion have been consumption-driven and import-dependent. As a result, Pakistan’s economy overheats once growth passes the 5 percent range. It is vital that the current government devote its energy and reallocate resources toward facilitating export growth, improving agricultural productivity, and addressing the domestic fuel production deficit.
Copyright Business Recorder, 2023