INTERVIEW WITH GUL MUHAMMAD LOT, CHAIRMAN MEHRAN GROUP OF INDUSTRIES

KHALIL AHMED
(feedback@pgeconomist.com)

June 25 - July 1, 20
12

PAGE: MR. GUL PLEASE TELL US SOMETHING ABOUT YOURSELF AND THE PRODUCTS YOU EXPORT.

GUL: First of all, I would like to thank you for providing me this opportunity to share my views and opinions in a well-renowned magazine in Pakistan. Coming to your question about myself, let me first of all thank Almighty Allah that wherever I am today, it is because of His blessing. When I completed my studies, my father was working with his business partner at a very low operational scale. I had a dream that I wanted to do something extraordinary for my country as well as for my family. As a result, I focussed on my family business and started my own journey by setting up a modern factory in Dubai. I was among very few Pakistanis who set up their businesses abroad andthis was almost 25 years back. With continuous efforts and a professional approach, I earned a sizable profit for my county by exporting spices, pickles and rice worldwide under the brand of Mehran. Over the last 20 years since the establishment of my business, we have been receiving numerous export award trophies from the FPCCI. Today, Mehran products are used by a majority of families, and last year we entered into the local markets in Pakistan and we are confident that within the Pakistani market Mehran will be a leading brand very soon. This would be due to the quality ingredients used, the dynamic and hard working team, and the continuous expansion and professional management of the group. Today we have an ultra modern factory in Jeddah Saudi Arabia and a very large and modern factory in Karachi. Besides business, I am associated with Pakistani politics. I have been a member of the provincial assembly and a minister in the Sindh government and a senator of the ruling Pakistan People's Party. In addition, I have made contributions to various committees of Senate. By nature, I am always optimistic, and I have a positive approach and I also strongly believe in hard work and this is what I would call the secret of my success.

PAGE: YOUR VIEWS ON PAKISTAN EXPORTS IN NEXT FISCAL YEAR.

GUL: It is a known fact that exports of a country play a key role in formatting the backbone for the economy of a country. If we look at our export figures, it is very disappointing and lacklustre. However, during the last couple of years, exports have improved significantly and this year hopefully, we shall achieve our export target. However, I believe that there is room for enhancing our exports and this can be done through value added exports and non-traditional items.

As a student of economics in my youth, I know that a country's balance of trade payments largely depend on its export . Unfortunately, during the recent past the exceptionally high oil prices have badly affected our balance of trade. However, thanks god the price of oil is decreasing and if it continues to further decline in the next couple of months, this would help improve our economy significantly. I would like to believe that there is a need to explore new markets to improve our exports and both at government and private sector levels, we need to work hard and our target should be to increase our exports by 100 per cent in the next five years. If we look at our neighbouring and regional countries like India, Bangladesh and Sri Lanka, they have focused in increasing their exports and they have succeeded. Why can't we follow their policies? If we improve our infrastructure and law and order situation, there is no reason why we cannot achieve our export targets. But, one thing is also for sure that we all have to play our due role in improving the country's exports. Let me draw your attention to the fact that next two years are very important for our country as huge amounts of loans are due to be repaid to the IMF and other lending institutions. As a result, this would affect Pakistan's foreign reserves so there is a dire need to enhance our exports.

PAGE: WHAT IS YOUR TAKE ON THE FEDERAL BUDGET OF 2012-13?

GUL: Pakistan has been passing through some serious economic and political problems for last few years. The war against terrorism alongside the world economic crisis has badly affected Pakistan's economy. Under these circumstances, it was very difficult for the government to present thus sort of budget but I congratulate the finance minister for presenting a very balanced budget under very difficult circumstances. However, there are many areas which need to be looked at for an improvement in Pakistan's economy. I would like to emphasize that there is a need to improve the life of a common person by controlling the inflation rate, providing basic infrastructure, an improvement in the health and education sector and most importantly to improve law and order within the country. The recent decrease in fuel prices will certainly help to control inflation and provide relief to low-income people within Pakistan. Last but not the least I am optimistic that the proposed revenue targets although initially seeming difficult, are not impossible. However, there must be a need to strictly monitor the financial planning for which ministry of finance and FBR have to play their role.

PAGE: WHAT BENEFITS WOULD THE INDUSTRY GET FROM THIS BUDGET?

GUL: Frankly speaking, there are not many benefits for the industry in the present budget. However, the government has tried to eliminate federal excess duty on many items, reducing the tariff rate at import stage and other fiscal measures, which would be a great relief to the industry. We all know our country is passing through a serious energy crisis and a shortage of gas, which is badly affecting industrial growth within the country. Needless to say we cannot depend solely on the government. The industry also has to play its role by contributing their maximum potential by paying its due share of tax to the treasury.

PAGE: HOW COULD WE ATTRACT FOREIGN INVESTORS FOR RENEWABLE ENERGY PROJECTS?

GUL: Let me tell you bluntly that we are bound to honour our commitments for energy contracts, and internationally these are binding on us so irrespective of impact we have to honour our commitments and that is how we can enhance foreign investor's confidence in the energy sector. There is also a need to have a transparent policy and consistency to deal with foreigners and a need to regain the confidence of foreign investors, which have been badly damaged in the past for various reasons. Our government is trying its best to rebuild the confidence of the international community in this sector and I am confident that Pakistan will succeed.

PAGE: YOUR VIEWS ON REMITTANCES IN NEXT FISCAL YEAR.

GUL: As I said earlier, the next two years are very important for the country as there are huge instalments due to be repaid on loans to agencies such as the IMF, and the World Bank. Therefore, our focus should be on remittances so that our foreign reserves are not affected. During the current year, the remittances from foreign repatriates have been very satisfactory and I hope they improve in the same manner in the upcoming year. The government is trying to curb those remittances, which are coming through unofficial channels through strict vigilance such as anti money laundering measures. However, it largely depends on the rupee parity rate in the open market and the interbank rate. I am sure that with the support of non-resident Pakistanis, our remittances would further increase in the next year. While concluding, let me clarify that the above are exclusive personal views.