INTERVIEW WITH ENGR. M.A. JABBAR, CHAIRMAN R&D, WTO CELL FPCCI

KHALIL AHMED
(feedback@pgeconomist.com)
July 11 - 17, 20
11

PAGE: TELL US SOMETHING ABOUT YOURSELF.?

ENGR. M.A. JABBAR: I am looking after research & development & WTO cell in Federation of Pakistan Chambers of Commerce & Industry. I have at my credit a long association with the apex body representing trade and industry of private sector in matters of consultation, preparation of recommendations on budget, trade policy and other subjects, which have bearing on the economy. I have been the Vice President of the apex body and Chairman of the biggest industrial area of Pakistan i.e. SITE Association of Industry having around 10,000 various types of industrial units. The paradigm of economic development in context of international trading rules as outcome of single package imposition by WTO has remained under my focus, giving me opportunities to have joined the ministerial of the WTO conferences from Seattle 1999 to Geneva during last years.

Education in engineering with post graduate specialization in power systems and working experience of business and member of different public sector bodies on their boards and close associations with the dialogue committees as stakeholder has also created a contingency of acumen of economics. The representation on different bodies in ministry of science and technology including member Pakistan Council of Science & Technology, Pakistan Standard Quality Control Authority, public sector organization under ministry of petroleum and natural resources, production, member advisory committees of federal tax ombudsman and Pakistan telecom authority have together exposed me to acquiring of the problems and their solutions in terms of financial, technical, administrative and economy related issues.

PAGE: WHAT ARE YOUR COMMENTS ON INDUSTRIALIZATION IN KARACHI?

ENGR. M.A. JABBAR: The growth of taxes and continuity thereof in the period two decades from now was based on the natural reasons. With increasing investment in services and banking sector holdings, the city appeared to be promising to share 75 percent of the industrial and service economy of Pakistan.

The law and order, ethnic strife, sectarian crimes, terrorism and increase street crimes with political parties inclination towards militancy for countering each others have all forced flight of capitals within and outside the country.

The city is in fact an economic engine for supporting the expenditures of the governments and public sector organizations.

The consistency of inconsistency of not breaking the deterioration of law and order has downgraded the revenue generation collections which are now in cases of direct taxes and some of the indirect taxes is reducing 50 percent of total tax collections.

The GDP of 300 days is reducing to GDP of 200 days due to persistent reduction of electricity supply since 2005 with continued increase in gap of supply and demand, later clubbed by the needful need of gas management.

Thebiggest industrial estate of Pakistan is short of water, short of infrastructure, and short of environment compliances. Inadequate or almost nonexistent drainage wastewater would be forcing the industrial estate to become the reflecting model of archaeological found places.

The law and order equally affecting the logistics results in absence of HR with promised payment of salaries for multiples of tens of days in a year, further affecting the in time deliveries of export consignments.

The industrial lands given by Sindh government in Karachi are witnessing the conversion of manufacturing category land into commercial and warehousing. Sindh government is oblivious to the whole process. Summing up the future of industrialization in Karachi is not promising as even the new industrial estates on super highway still lack the required support of utilities to sustain the motivation for investments. The government after 18th amendment is now with more levers to jack up the industry and bail out the ailing manufacturing sector through various measures which are easily traceable and need to be addressed in the national interests.

PAGE: WHAT KIND OF IMPACT HAVE YOU NOTICED IN THE BUSINESS ACTIVITIES OF KARACHI AMID DISTURBED LAW AND ORDER SITUATION?

ENGR. M.A. JABBAR: Deteriorating law and order is causing reduction in industrial growth and flight of capital. The service sector is now preferring to have its operational head offices elsewhere. Cost of security resulting into higher operating costs appears to be preferred over unsecured environment prevailing in Karachi, which during the 07 years, has resulted in to killings of many people. The GDP of Karachi is declining, employment is reducing, the average life is becoming under more stress due to job losses and reduction of working hours. Business centers and shopping malls close early for fear of disturbances.

PAGE: WHAT ARE YOUR COMMENTS ON INDUSTRIAL ASSOCIATIONS OF KARACHI?

ENGR. M.A. JABBAR: More than seven industrial associations based on geographical boundaries are making hue and cry on power shortages, water shortages and gas managements. These associations also engage in discussions with the local functionaries, ministers from Sindh government and as well as from federal government. The continued dialogues mostly revolve around the needful corrections in law and order, electricity and water requirements. The office bearers are complacent. The culture of dinners and luncheons needs a paradigm shift. The office bearers elected for one year can best do what they are doing in the existing culture set by their leaders who are holding different associations as their patrons and chief patrons.

PAGE: WHAT KIND OF GOVERNMENT EFFORTS IS REQUIRED FOR THE PROMOTION OF INDUSTRIALIZATION IN KARACHI?

ENGR. M.A. JABBAR: With the NFC and 18th amendment and with the transfer of departments to the provinces, the provincial governments should have better role to play.

ENERGY HAS BECOME PROVINCIAL SUBJECT.?

Therefore, the development of this subject also vests with the decision making of the province and law and order is always provincial responsibility. As far as the federal government is concerned, it may allocate more shares of Karachi development in medium term planning. The Sindh province should also manage the oil and gas exploration, have more share in decision makings of apportionment of discovered gas and oil in the province, and make use of non bankable oil and gas reservoirs for connecting to the transmission and distribution by installing the on spot power generation. The province should also seek a strong role in all the energy sector organizations, which may be devolved at later stage so that the needs of Karachi could be secured for capacity utilization of the present industry in Karachi. The federal government must approach the state bank to trade off adverse impacts of high interest rates so that restructuring and rescheduling are offered to the non performing industries in Karachi in order to help industrialization.

PAGE: YOUR VIEWS ABOUT TAX COLLECTED IN KARACHI.?

ENGR. M.A. JABBAR : The taxation is federal subject except agriculture tax and tax on services. The quantum of taxes and percentage of taxes collected from Karachi being major in number as percentage of total tax collection in Sindh deserves to be appropriately allocated for sustaining the industrialization in Karachi. The just and fair receipts from NFC will provide a strong supporting base for meeting expenditures of improving infrastructure and environment for attracting investments in Karachi.