Economic uplift imperative to Pakistan’s well-being: LCCI President

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On a solemn note, the newly elected President of Lahore Chamber of Commerce and Industry (LCCI), Shahzad Ali Malik, voiced his fears that the economy and the nation as a whole are passing through a particularly difficult stage in the troubled history of Pakistan. Prudent policy decision and implementation on part of the government and the active participation of the private sector were essentially intrinsic to any sustainable solution to Pakistan’s tribulations.
While discoursing on the major problems faced by commercial enterprises, he succinctly focused on the extremely high mark-up rate, high energy tariffs and poor security situation, which had an enormous impact on the competitiveness of Pakistani products both in domestic and foreign markets.
Speaking exclusively to Pakistan Today, Shahzad Ali Malik, speaking in calm and measured tones displayed his considerable command over the issues faced in the Pakistani business environment. He expressed his conviction that an appropriate strategy, implemented by dedicated professionals, could deliver the path to economic revival in a surprisingly short time. This would occur only if these professionals were given absolute freedom without obstruction from the elite.
When asked to comment on much heralded EU concession package, he termed it an achievement but with several inherent conditions and impediments. Elaborating, he voiced his concern that continued exemption of bed-linen was sufficient grounds to reconsider the decision. He said this concession package was only for a limited period of three years but Pakistan needed trade rather than aid so that Pakistan could finally stand tall in the fellowship of nations, proud of its achievements.
The fact that Pakistan’s textile exports to the EU in recent years eclipsed those of regional rivals such as India and China is indicative of the superior quality of Pakistani textile products. The exclusion of major textile products from the concessions package considerably lessened the utility of the EU concessions to the business community.
Shahzad Ali Malik opined that business community should explore new lucrative markets instead of treading the same worn path. Markets of considerable potential include China, Turkey, Central Asian States and African countries; eventually the volume of exports to these locations would establish a permanent Pakistani trade presence, which may outrival business with the developed world. The fact that these locations are invariably in the developing world means that these markets will show healthy growth when developed markets begin contraction is a major asset in the future.
Highlighting the energy crisis LCCI president said that availability of uninterrupted and inexpensive energy was a major shortcoming, which stymied industrial production and hence economic growth. The political debate of Kalabagh Dam had been unduly blown out of all proportions over time. “Pakistan has wasted up to 54 million acres feet of water each year, while facing a water shortage of around 10 to 15 percent because of our singular lack of focus with regards to any major dam project”, he lamented.
Malik underlined that the desperate need to cobble together national consensus for the construction of mega dams. These dams will assure food security of all citizens, a fundamental rights and lower cost of production and diversify the energy portfolio which is currently inordinately based on thermal sources. Currently, the country was facing dual problem on a very basic level – the alarming power deficit twined with the remarkably high tariff, he said.
The LCCI president demanded the cooperation of the entire Executive Committee of the Lahore Chamber of Commerce and Industry to achieve this vision. The developing of consent within the business community for the construction of the Kalabagh Dam was central to the creation of sustainable economic growth.
Responding to a query submitted to him, Malik in turn, questioned the recent 50 base points hike in the discount rate by the State Bank of Pakistan (SBP). The high mark-up had already made conducting business in Pakistan well neigh impossible.
He believed that the decision was a body blow to the economy, as the availability of equity to the business community has been made dearer with one stroke of pen. In a solemn declaration, the SBP had adopted a wrong way of dealing with inflation. The increase in the cost of doing business might end any prospect of economic growth, which was just beginning to register signs of recovery.
Malik opined that the Central Bank announcement would not help curtail fiscal deficit or harness inflation, this technique had failed before and was almost certain to fail once more. He said that at a point in time when the economy was in dire need of a stimulus package, along the lines of the policy promulgated the world over in response to global recession; the increase in interest rate will countermand economic recovery. The cost of doing business in Pakistan was already highest in the region, a trend which was set to continue, he added.
Talking on the taxation scenario, LCCI president said that the rationalisation of the taxation system would also be taken up with concerned authorities. He said that the main objective of the Lahore Chamber of Commerce and Industry was the development of trade and establishment of industry. “All available resources must be utilised for economic development. Right now, all businesses face the impending threat of economic meltdown; none of us can escape the consequences of such a catastrophe”.
Malik also stressed the need of research and development in industry. He disclosed that LCCI was revamping its Research and Development Department to provide sector-specific data to trade and industry segments. He pointed out that LCCI’s R&D Department was established in 1985 by the then LCCI President Muhammad Shahbaz Sharif which made the Lahore Chamber the premier Chamber of the country.
He said that research was an area, if given due attention could achieve miracles. He said that he would, in active collaboration with fellow businessmen, work towards the promotion of research culture in Pakistan.
Talking about the disturbing lack of security, the LCCI president said that it was curtailing commercial activity. He said that he had personally mapped out the alliance of the business community and police authorities to evolve a new active strategy to thwart the nefarious designs of the terrorists. In this regard, the business community was trying to protect and serve society.
Malik said that issues faced by the business sector must take precedent immediately; the private sector was the engine of growth and key to the economic transformation of Pakistan. This was borne out by the lessons of history, the challenging of the spirit of private initiative and innovation were instrumental in the building of empires and nations in a time honored fashion repeated throughout history.