The Pakistan Business Council - a business advocacy body - has called for measures to boost exports, strengthen the basis of import substitution, and restore disposable incomes to trigger growth in line with its "Make-in-Pakistan" thrust.
In its publication, "Growth Drivers - the time to trigger them is now", the PBC makes a strong case for growth to revive jobs and called for policy consistency and avoidance of policy reversals such as in the case of the electricity tariff for the five export sectors.
It urges alignment to overcome the ways of working in which various ministries pursue short-term objectives at the cost of long-term growth. In a balanced account of the progress, the PBC credits the government with a number of positive steps.
These include market-driven exchange rate, renegotiation of the trade agreement with China, changes in the fiscal regime to promote group formation and creating a more level playing field between commercial importers and manufacturers.
However, PBC also points to a number of measures that are essential to trigger growth. Its argument for a reduction in the cost of borrowing is based on an analysis of inflation, which concludes that a policy rate of 13.25% for a 5.5% non-cost-push inflation is neither the right medicine nor the right dose.
It calls on the government not only to complete the process of tax refunds but also to reengineer the processes to avoid their build up in the future.
On taxes, it believes that the IMF programme has put the cart before the horse. Without restructuring the FBR, a 47% increase in tax collection will put pressure on existing taxpayers that will be coerced to pay more. This, it warns, will hamper growth.
In a detailed checklist it points to the need for a National Charter for Exports, removal of the LC margin on industrial inputs, withdrawal of turnover-based minimum taxes, restoration on the investment tax credit, implementation of cascading import tariffs on materials not available in the country and the fast-tracking of "plug & play" facilities in Special Economic Zones. The PBC has done several studies supporting most of these measures. It has also offered the Ministry of Commerce the benefit of its research on gaining parity with Bangladesh for access of Pakistani goods into Canada, Japan and Australia.
This could unlock an export opportunity of $3 billion a year.
PBC believes that the long-term solution to the current challenges lies in creating (and reviving) employment and raising the disposable income of millions who have been impacted by economic recession.
"Pakistan's global standing is contingent on the strength of its economy. Both have significant room to grow," it concludes.
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