Only export-led growth can steer Pakistan to the economic stability and help to emerge as one of the leading economies of South Asia. Those factors should be rooted-out which are hampering the exports related sectors.
President, Lahore Chamber of Commerce and Industry (LCCI) Irfan Iqbal Sheikh expressed these views while addressing a 24-member delegation of 26th Senior Management Course of the National Institute of Management (NIM) here Wednesday. Chief Instructor Akram Ali Khawaja was leading the delegation.
The LCCI President said that Pakistan exports are heavily concentrated on a few products and traditional markets that are the biggest reasons of below the potential exports statistics. He said there is a need to diversify these exports products especially focusing on value added products which include engineering items, Halal foods, pharmaceuticals and textile.
He informed the participants that LCCI has declared an export emergency this year and has established an Export Facilitation Center. He said that commercial sections of Pakistani embassies abroad should help exporters to find out new buyers for their products. There is a dire need to diversify the exports in terms of market as around 55 percent of Pakistan's exports go to ten countries namely USA, China, UAE, Afghanistan, UK, Germany, France, Bangladesh, Italy and Spain. He said that new products and value addition would help Pakistani exporters to capture a large share in the world trade.
To a question, Irfan Iqbal Sheikh said there are needs to make systematical changes in existing taxation system. He cited the example of 4.5 percent withholding tax saying that it is very high as compare to the profit margin that is hardly 1-2 percent. Withholding tax of various sectors should be set according to the respective profit margins of those sectors, he added.
While answering another question about interest rates, the LCCI President said that policy rate increased to 13.25 in July 2019 as compared to 6.5 percent in May 2018. Sharp increase in interest rate pushed up borrowing cost that retarded investment, capacity generation and hence exports. He said that interest rate should be brought down to a single digit.
About rupee devaluation, he said that government has to come up with a clear plan about exchange rate so that businessmen can do a long-term planning for their businesses.
While giving a detailed presentation about ongoing economic scenario, LCCI Senior Vice President Ali Hussam Asghar said that Free Trade Agreements (FTAs) with the regional countries, Central Asian States, Middle East States and African countries can give a quantum jump to the national exports. He emphasized the need for developing regional trade, product specific and target oriented marketing strategy. He said that new markets and new products should be explored to reduce country's dependence on few commodities and countries.