The Lahore Chamber of Commerce and Industry has urged Prime Minister Gilani to convene without any further delay chamber's round table conference to prepare a 15-year economic roadmap to cope with challenges being faced by the economy.
President LCCI Irfan Qaiser Sheikh in a statement on Friday said the private sector was the main stakeholder when it comes to economy and without taking it onboard in the formulation of business related policies an economic turnaround would be daydream.
He said that an acute electricity, gas shortage, over 72 percent hike in electricity prices in the last five months, highest ever mark-up, huge banking spread, Rs 600 billion annually loss making state-owned enterprises, unskilled workforce and poor infrastructure are the main factors of economic meltdown and the private sector has the ability and the capacity to prepare a 12 to 15 years economic roadmap to overcome these issues by ensuring sustainable growth.
The president LCCI said that interest rates needed to be in single digit for reducing the cost of borrowing while ensuring that banks increase cash-flow lending and reduce emphasis on collateral. Improving access to finance must also be accompanied by increased availability of venture-capital.
He said that the country needed to invest heavily to overcome growing electricity and gas problem resulting from energy policy and planning neglect of the last three decades. Electricity peak supply-demand is usually between 5000-6000MW costing the economy around Rs 250 billion per annum.
Almost 70 percent of power generation is based on oil/gas. This is expected to increase the gas supply-demand gap to around 1,127 million cubic feet per day (MMCFD) in January and 1,046 1 MMCFD per day in February. Pakistan needed to fast track the construction of infrastructure for the import of gas from Qatar, Iran, and Turkmenistan. Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-Iran (TAPI) pipelines are critical for meeting future needs of the economy and society; Iran can supply 750 MMCFD while TAPI has 1300 MMCFD capacity. Pakistan should formulate an Energy Security Plan and electricity supply should become an essential part of this framework, he maintained.
Sheikh said the economic growth requires infrastructure. The country was falling behind in the development of widespread Special Economic Zones, Export Processing Zones, Industrial Parks and other specialised infrastructure. They need to invest in the essential infrastructure for development of such roads, bridges, airports and rail network as well as widespread access to affordable and reliable utilities and a nation-wide digital outfit geared to increase productivity.
"We are still not using information and communication technology to improve our way of doing business. We also need to build large-scale research and development infrastructure to support innovation, high-quality and high-value production and diversification of economic activities," he added.
The president LCCI said that the Public Sector Enterprises (PSEs) such as Pakistan International Airlines, Pakistan Steel Mills, Pakistan Electric Power Company, Pakistan Railways, National Highway Authority, Pakistan Agriculture Storage and Services Corporation and the Utility Stores Corporation continue to exert substantial burden on the public finance.
These eight PSEs are incurring losses of around Rs 600 billion annually. The LCCI recommends immediate revival of the privatisation programme. Selling these organisations for Rs 1 each would also be better for managing the economy responsibly. This would immediately reduce a burden of around Rs 600 billion on the public finance, which is considerably higher than Pakistan's annual development budget.
He said that Pakistan suffers from a skill deficit in sector of the economy. Education, vocational training and skill development do not keep up with the needs of a changing economy. Only 3 percent of the population undertake any vocational and technical training after school as compared to over 70 percent in the European Union and 40 percent in Korea. Despite establishing the Technical Education and Vocational Training Authority (TEVTA) at the provincial level and the National Vocational Technical Education Commission (NAVTEC) at the federal level, vocational training is still falling short of producing a highly skilled workforce. He urged the government to fund partnerships between firms, clusters and academia and training providers to train, re-skill and up-skill workforce.