BUSINESS ENVIRON BECOMING HARSH DUE TO HOST OF PROBLEMS

KANWAL SALEEM
Dec 01 - 07, 2008

Business environment in Pakistan is becoming harsh due to host of problems such as power and gas crisis, high cost of doing business, high inflation, increase in mark up rate, lack of skilled labour force, and high tariffs of utilities.

Pakistan needs to put immediate attention to facilitate an environment conducive to trade and investment, including a transparent and efficient border administration, well-developed transport infrastructure and highly efficient services. Pakistan has a relatively better environment to do business as compared to several countries in South Asia.

This reflects good investor confidence which, however, is found to be undermined by Pakistan's non-competitiveness with emerging markets such as India, China, Hong Kong and the Middle East.

Experts believe that Pakistan shows its competitive advantage on the indicators such as non-tariff barriers, time for import, transshipment connectivity index which is the type of transshipment connections available to shippers from Pakistan on bilateral routes, quality of rail road infrastructure, road congestion, linear shipping connectivity etc. Pakistan is blessed with all the resources. It has very fertile lands, ample water, huge minerals and above all more that fifty per cent its population is less than the age of 25. A little attention could do the miracle.

ACCESS TO PAKISTANI MARKET IS BETTER

Access to Pakistani market is better, as it was ranked at 98th position while Sri Lank is at 70, Bangladesh 104 and Nepal 106. Pakistan remains behind India and Sri Lank in South Asia in terms of free flow of trade, which bears witness to these countries' openness to international trade and investment, as part of their successful economic development strategy. According to Global Enabling Trade Report-2008 released by the Competitive Support Fund (CSF), covering 118 economies worldwide, Pakistan is ranked at 84th position among the 118 other economies, whereas its neighbours Sri Lank and India secured slightly better positions 70 and 71 respectively as compared to Bangladesh (110) and Nepal (116). Compared to other South Asian countries including Pakistan, access to India's market is fairly difficult as it occupies 105th position on the relevant sub-index.

Although tariff rates remain slightly lower in India, access is hampered by non-tariff barriers which earned India 115th rank. Pakistan is ranked at 106th position in terms of non-tariff barriers followed by Sri Lanka (77), Nepal (102), and Bangladesh (105). Pakistan's has made a significant improvement in over-all indices from market access to business environment. Pakistan is ranked at 78th in border administration, 70th in transport and communication infrastructure and 83rd in business environment.

But coming closer to India, Pakistan will have to improve border administration to facilitate trade, improve transport and communications infrastructure necessary to facilitate the movement of the goods from the border to destination.

MAIN ISSUES OF BUSINESSMEN

Businessmen have described high mark-up rates, acute shortage of electricity and gas, inconsistent policies, deteriorating law and order and shortage of skilled labour as the main issues confronted to the business community. They called for adopting a collective response from both the business community and the government as neither the government nor the private sector alone can solve these giant issues.

The business leaders including Mian Anjum Nisar, Mohammad Ali Mian, Shamim Akhter said that in unprecedented crisis-like situation the country has been passing through for the last many months every individual in general and the business community in particular should play its due role with strong commitment. They were of the view that it was high time that all the business leaders should join their heads for finding out a solution to stop economic meltdown.

RE-ENTRY INTO THE IMF PROGRAMME NOT A COMFORTING SIGN

They were of the view that Pakistan's re-entry into the IMF Programme after seven years was not a very happy sign because in the past we had not pleasant memories with the IMF.

They asked the government to evolve short-term, medium-term and long-term policies in consultation with businessmen who are the real stakeholders and then ensure the implementation of the policies as non-implementation of policies falls in the category of bad governance that is mother of all ills. "Had the policies in the past been implemented in letter and spirit, the economic situation would have been quite satisfactory," they maintained.

The LCCI Executive Committee members said that from the platform of the Lahore Chamber of Commerce and Industry they would make every effort for the economic turnaround and to solve the issues being faced by the business community.

GAS LOAD-SHEDDING HITTING INDUSTRY

Unscheduled gas load-shedding in Kot Lakhpat Industrial area has crippled production process of a large number of industries including Textile, Pharmaceutical, Plastic and Chemical and the government should force the Sui Gas authorities to ensure uninterrupted gas supply to industrial sector.

President Quaid-e-Azam Industrial Estate Mian Nauman Kabir said that the SNGPL authorities should concentrate on Industry instead of domestic consumers, as if the Industry would stop functioning, the domestic consumers would be the ultimate sufferer. He said that there are over 400 industrial units in Kot Lakhpat Industrial area with a workforce of over 40,000 and if these units would stop their operations because of non-supply of gas, one can well imagine the unemployment situation. He also feared that the country would not be able to meet its export targets if the situation remains the same for quite some time.

PAKISTAN IS A LAND OF OPPORTUNITIES FOR INVESTMENT

According to Federal Minister for Investment, Senator Waqar Ahmed Khan, Pakistan is a land of opportunities for investors.

There is an investment friendly environment in Pakistan, incentive packages and tax incentives for investors in the country's commercial zones and above all investors' security. Pakistan offers almost conducive environment for local and foreign investors, he said. 'While the global economy is faced with some recession, there is no slow-down in the projects of the country, and no fluctuation is witnessed in the growth and return of these projects.'

About Pakistan's priority sectors for foreign investment, Waqar said, "We want investment in the oil and gas, the hotel industry, food, agriculture and energy sectors, and we are also looking for the latest technologies being employed in all sectors". President Asif Ali Zardari is committed to ensure political stability in Pakistan so as to attract maximum foreign investment, which is among government's top priorities.