INTERVIEW WITH MIAN ABRAR AHMAD, PRESIDENT KCCI
Sep 17 - 23, 2012
PAGE: HOW WOULD YOU COMMENT ON ECONOMIC STABILITY IN PAKISTAN?
MIAN ABRAR AHMAD: Country's economy continues to be in dire strait, necessitating initiation of a host of structural reforms, which have their own cost and repercussions on the business on the business community for adjustment. In such a scenario, when the government is keen to mobilize more revenue to offset their budgetary deficit, the business and industrial community is called upon to accept added responsibilities. The Chamber continues to play its dynamic role to espouse the cause of the private sector and to identify the grey areas and to suggest corrective measures. A broad-based pre-budget recommendations in the light of members' suggestions, was submitted to the government. During the last few consecutive years, Pakistan's Economy weathered unprecedented set of challenges which have impaired the economy with irreparable losses that need concrete measures from the Government for normalization. The said challenges in the form of internal and external threats, deteriorating law & order situation, energy and gas crisis, increased inflation, slow pace of local and foreign investment, high operational cost of industries and trading concerns, inclined export refinancing rates and high interest rates penalized the business circles at large during the year. Energy and gas crisis and bad law and order situation acted as the most brutal stabs in the nucleus of national economy which harshly compelled the industries to function below par and under capacity. Perception of Pakistan is also distorted in the countries around the globe, particularly in United States of America and European Union which need correction. Closer cooperation between Pakistan and USA is crucial, particularly the Pakistani community and private sector of USA and EU and private sector of Pakistan should join hands to clear the perception of Pakistan and make the decision makers of USA & EU understand difficulties Pakistan is facing due to non-availability of trading access to US and EU markets
PAGE: WHAT IS YOUR VIEW ON INDUSTRIAL PRODUCTION OVER THE PERIOD OF LAST ONE YEAR IN PAKISTAN?
MIAN ABRAR AHMAD: Subsequent to this manifold crisis situation, trade and industrial circles faced a drastic slowdown. Basic amenities and utilities such as electricity, gas, water, land and other inputs prices which have been raised and further increased, ultimately culminating in abrupt multiplication in the of cost of manufacturing and doing business. Inflationary trend in the food items further aggravated the situation and all segments of the society, in one way or the other, remain affected. Forceful strikes by political and religious parties further affected. In Pakistan due to energy crisis our industry is working eight hours or less than that compare to India, China and other countries where industry is running 16-24 hours a day. Can you imagine the resilience of Pakistani nation and business community that we are competing the world by only working for 8 hours a day. What would happen if we worked for 24 hours a day like any other country? Overall industrial production was hampered due to energy and gas crisis as well as forceful strikes and shutdown. We fear that the export targets might not be achieved this year as the export oriented industry was worse affected.
PAGE: YOUR VIEWS ON INFLATION IN PAKISTAN?
MIAN ABRAR AHMAD: To control inflation, the Government adopted the policy to increase discount/ interest rates which resulted an upshot in the cost of doing business. Due to increased interest rates, high bank spreads and export refinancing rates, the industries could not perform at par and ultimately the increasing trend was passed on to the prices of products. The government must brought down the interest rates to single digit and decrease export refinancing rates and stop borrowing from central bank and other banks enabling the private sector may avail the loans and financing schemes. Printing of currency notes in excessive quantity has also affected the rupee dollar parity which is another factor of enhanced inflation.
PAGE: YOUR VIEWS ON EXPORTS AND IMPORTS?
MIAN ABRAR AHMAD: Pakistan is very badly discriminated by Europe and United States by blocking our trading access to their respective markets. We are not allowed to export our major earner textile in which Pakistan have invested heavily and which is Pakistan's prime product. Though there exist GSP but major Pakistani products are not allowed under this scheme. As you are well aware of the fact that Pakistan is an energy hungry country, there is a riots like situation in Pakistan due to energy crisis. Besides our internal problem we have been badly discriminated by international community regarding obtaining energy in Pakistan. When we talk about generation of energy from nuclear resources we are doubted for proliferation and stockpiling of nuclear arsenals. When we talk about generating energy from nuclear resources, we are doubted for nuclear proliferation. Whereas our brotherly country United Arab Emirates (UAE) has embarked upon ambitious 560 MW energy programme from four nuclear power plants with the assistance of Korea and Pakistan being a nuclear country is pressurized not to generate energy from nuclear. Likewise, India is now having civil nuclear energy arrangements with USA and even Australia has agreed to supply uranium to India and UAE for its power plants. When we talk about generating electricity from coal as we have second largest coal reserves in the world in Thar region we are told that it is a dirty energy. Recently the World Bank has withdrawn its 300 million dollars assistance for research project of Thar Coal despite of the fact that similar coal is being used in various power plants around the world and one in U.K. Yorkshire. When we talk about generating energy form gas we are told not to have gas pipe line from Iran and instead we should go for TAPI (Turkmenistan-Afghanistan-Pakistan-India) Gas Pipeline (Trans-Afghanistan Pipeline) this is a clear cut practical example of not only discriminating Pakistan for trading access but also from having its no own energy policy. TAPI (Turkmenistan, Afghanistan, Pakistan & India) gas pipeline project is 1735 kilometers away with 735 kilometers of hostile territory of Afghanistan and whose going to invest in that kind of project. In view of international pressures and curtailing Pakistan's economic growth, Karachi Chamber of Commerce & Industry as the leading representative of the business and industrial community of Pakistan and particularly of Karachi have great reservations. We strongly recommend to Government of Pakistan to come up with clear cut energy security plan for next 20 years to be shared and approved by all political parties of Pakistan and finally to be approved by the parliament thus all political parties whether in the government or not would be responsible to follow and implement the proposed energy security plan. This 20 years Energy Security Plan should be based on 40% from nuclear, 40% from Thar Coal and 20% from hydal and alternate energy or else coming generations of Pakistan would never forgive governments of the time. Successive governments in Pakistan are relying on aid packages from United States which is not good for the country as KCCI believes in trade not aid. We believe that aid coming from US is evaporated in making feasibilities and other non-productive areas. Likewise, some part of it goes to NGOs and some part to other governmental departments. It has no trickledown effect on masses.
As President of Karachi Chamber of Commerce & Industry, I availed the opportunity to lead the second high power business delegation to United States of America where we had meetings with high profile dignitaries and government officials particularly from US State Department where I strongly recommend and urge government of United States to understand Pakistan's position and to give us trading access as we strongly believe in "Trade" not "Aid". Therefore, it is our sovereign right to have our own energy policy and it is a duty of comity of nations to give Pakistan trading access to the respective countries.
During my meetings at US State Department, I also gave a new terminology that if at all aid has to come to Pakistan from US, it should be for trade only and the new terminology give was "Aid for Trade". I gave an example of BOT - Build, operate and Transfer and emphasized that USAID aid should invest in the projects like Metro railway in Karachi, mass transit, energy sector, town planning, road construction, education, medical, mining, marble, granite, rehabilitation and other projects.