July 28 - Aug 03, 2008

The government would have to initiate the process of consultation with all the stakeholders including the chambers of commerce and industry in the country if it is interested in bringing economic turnaround as the economic meltdown is fast reaching the point of no return.

This was the crux of interview conducted with the Vice-President of Lahore Chamber of Commerce and Industry (LCCI), Shafqat Saeed Piracha.

Shafqat Saeed Piracha, who looked very disturbed over the ongoing economic situation of the country, said that things were not as good as they should be or the way we wanted to see them.

Piracha told PAGE: "We are not against the government, we are simple businessmen and above all as patriotic as any other individual living in Pakistan, but we want to convey this message to the government that bureaucracy was not allowing it to ensure facilities to the masses.

February 18 general election and its results gave us hope that good days are coming but all the hopes dashed with a bang when economic turmoil started taking shape over the issue of restoration of judges".

Shafqat said joining hands by Nawaz Sharif and Asif Ali Zardari has sent a very positive signal abroad and the visionary people have started making predictions that the country now has a bright future.

When asked how does he, being the Vice-President of the premier Chamber of the country, evaluate the first 100 days of the present coalition government, Shafqat Saeed Piracha said that the government has failed to come up to the expectations of the masses what to talk of the business community.

At present, businesses are not in good shape. No doubt, quite a few international factors including surging oil prices have contributed a lot to present slump in businesses but increase in the prices of gas, which is an indigenous produce, has also played a vital role in vitiating the things, Piracha said. Had the government initiated the process of consultation with all the stakeholders, the situation would have been well in control. However, unfortunately those who are at the helm of affairs adopted a totally different way, he added. Please allow me to call a spade a spade, the textile industry, which has more 57 per cent share in our export revenue, has not been given any special concession, he said.

About trade policy 2008-09, he said the policy had failed to produce a breakthrough export promotion strategy. It lacks concrete measures towards the curtailment of imports. In other word, it is a traditional run-of-the-mill trade policy, he added in which no major steps have been announced to contain the rising cost of doing business in Pakistan. Industrial estates need development and promotion points, Piracha said.

The LCCI Vice President said Pakistan needs an export-oriented trade policy, new investment, knowledge and technology in order to promote its export base-this is not possible without political stability.

Shafqat Saeed Piracha further said that a pro-investment fiscal and monetary policy is need of the hour taxation system remains complicated with low tax-to-GDP ratio of around 11% instead of 15-16% and monetary policy remains tight for the last two years. Tight monetary policy has failed to curtail inflation, he argued.

Talking about poverty, he said the country consistently needs 7-8% of GDP growth. This is not possible without a sustainable 10-11% real growth in exports per annum. In order to achieve these goals, Pakistan needs to increase its investment-to-GDP ratio to around 30%.

He further said that trade liberalization needs to be speeded-up as it leads to new investment, knowledge and technology essential for increasing productivity, high growth and low inflation. This is a new growth theory which is placing more and more emphasis on variable like knowledge which can be promoted in the absence of free trade, he said.

He called for strengthening the TDAP, which is responsible for the implementation of trade policy, and making it more effective in terms of achieving targets set in the trade policy. He said the TDAP needs to be more proactive in searching new markets. "We need to look beyond the EU and US. Pakistan needs to concentrate on many other exporting products destinations such as Japan, South Korea, Mexico, Brazil, African countries and OIC. Export-base should be more in line with the demand of global quality value chain. There is a need to promote high-tech manufacturing base to significantly improve exports'', he said.

He said the government needs to focus on improving the capacity to negotiate market access with more meaningful implementation of domestic trade reforms. He also called for reducing the cost of dong business in Pakistan for greater competitiveness in international market.