TARIQ MALIK did his Bachelors in commerce from the University of Karachi in 1973 and since then has been engaged in various businesses. He is one of the leading Muccadum, appointed representatives, of 24 banks operating in the country — both local and foreign. He is also engaged in manufacturing of leather garments and exports as well as a trader of commodities, particularly pulses and steel scrap. He is an active member of business community and is presently serving as the vice chairman of Banking, Credit & Finance Standing Committee of Federation of Chambers of Commerce and Industry (FPCCI) and is also a member of Credit Advisory Committee of the central bank, the State Bank of Pakistan. He is also the President of Pakistan Industrial & Business Forum and Chairman of Banking & Finance Committee of Pakistan Hardware Merchants Association.

Tariq Malik did his Bachelors in commerce from the University of Karachi in 1973 and since then has been engaged in various businesses. He is one of the leading Muccadum, appointed representatives, of 24 banks operating in the country — both local and foreign. He is also engaged in manufacturing of leather garments and exports as well as a trader of commodities, particularly pulses and steel scrap. He is an active member of business community and is presently serving as the vice chairman of Banking, Credit & Finance Standing Committee of Federation of Chambers of Commerce and Industry (FPCCI) and is also a member of Credit Advisory Committee of the central bank, the State Bank of Pakistan. He is also the President of Pakistan Industrial & Business Forum and Chairman of Banking & Finance Committee of Pakistan Hardware Merchants Association.

PAGE: For the benefit of our readers tell us what a Muccadum is?

TARIQ MALIK: They are the representatives appointed by the banks to control and monitor stocks pledged by the banks as and when they require. For instance, we have some 300 sites nationwide where we stock cotton and release it as and when we gets the instruction from the bank to release it to a ginner or whoever may be the party. We store the commodity, make necessary arrangements to guard it and ensure its supply primarily serving as bank's appointed representative.

PAGE: You are associated with banking industry in various capacities. What you feel is the major detriment to expand our export base?

TARIQ MALIK: I strongly feel that Small and Medium Enterprises (SMEs) can play a vital role to expand our export base. This, however, would not happen without ensuring that SMEs, particularly those export-oriented, have access to soft-term loans. Though the present government should be given the credit to address this important issue, there is a need to extend these loans to more SMEs to encourage more export-oriented SMEs to play their due role in the national economy. Specific attention should be paid to SMEs engaged in production of non-traditional items which have in big demand worldwide — for instance furniture, jewellery, boutique and cut and polish gems and precious stones. High mark-up rate is also limiting the role of the SMEs.

PAGE: How?

TARIQ MALIK: As mentioned above the single biggest hurdle to encourage SMEs to play their due role in the national economy is finance. This is all the more true about the running finances, particularly the financing for the procurement of the raw material. Raw material financing is a running finance and when the interest rates are high, as is the case here, it inflates the production costs. While the interest rates on running finances differ from bank to bank, on the average they still remain high despite decrease recently. The interest rates on running finances which are calculated on day-to-day basis on the overdrafts available to the SMEs workout to be extremely high thus discouraging the SMEs to help expand our export base. This, however, is just one of the major factor.

PAGE: So what are the other factors discouraging the expansion of the export base?

TARIQ MAILK: The rising cost of utilities in particular and raw materials in general are pushing the production costs to a level which are rendering them incompetitive in the international markets. The situation is further worsened by a dollar which has shed substantial value against rupee at present. This has squeezed the profitability for the exporters as at present they are getting Rs 59 for every dollar compared to Rs 67 some 14 months ago.

PAGE: You are also engaged in leather garments manufacture and exports. How is the situation there?

TARIQ MALIK: The sluggish global economy has taken a heavy toll on the exports of leather garments despite the easy and affordable access to the basic raw material — skins — within the country. The rising prices of utilities have pushed the production costs where they are in danger of rendered incompetitive in the international markets against such traditional competitors as India and Turkey. As is, the export of leather garments has registered a substantial decline. It is imperative to realize that unlike many other industries leather garments industry is wholly an export-oriented industry.

PAGE: You also trade in commodities. Why the prices of pulses, which we produce in abundance, are touching such high levels?

TARIQ MALIK: It has to do mainly with the distribution system which has many players each of which having a share thus resulting in inflated prices at the retail level. The commodity market, particularly produce and pulses, is strictly a credit-based market comprising of various players at every stage. There are growers, aarthis, wholesalers, stockists and finally the retailers. In addition, there are brokers and commission agents at all stages of this distribution chain. This increases the financial costs at every stage of distribution thus cumulating in high prices of pulses at the retail stage.

PAGE: You also trade in steel scrap. Is ship-breaking is on the verge of collapse?

TARIQ MALIK: There are two primarily sources of steel scraps, imports and ship breaking. The demand for steel scrap depends on construction activities and big projects like dams and industries. With the slowing down of the construction industry and absence of big projects the demand for steel scrap has been low. I, however, hope the project to raise the height of Mangla Dam would result in increase demand for steel.