Syed M. Aslam
June 09 - 15, 2003



MAJYD AZIZ is a well known industrialist and a business figure. He is the former chairman of SITE Association of Industry and the founder and ex-secretary of Pakistan Italy Business Forum and is actively involved in numerous other industry, trade and business and activities. Born in Karachi, Majyd completed his high school education there. He did B.S. in General Business Administration from Ball State University, Muncie, Indiana. He did Masters in Management from the same university in 1972-73. He has emerged as the strong proponent of unrestricted trade between Pakistan and India and feels that 'it's time to shed the myopic thinking to get out of the cocoon' for the greater people of a people which collectively represent one-fifth of the humanity. He also feels that the absence of a free-trading bloc; like NAFTA, EU and Asean, makes bilateral trade between the two countries all the more important. He however, advocates for a 'meaningful' trade with India importing machinery and engineering goods instead of consumer products, many of them harmful. He says that Pakistani textile industry, of which he is a part, would benefit from the bilateral trade finding in India a competitive source for raw materials, dyes, chemicals, machinery, etc.

PAGE: What are your expectations from the Budget 2003-04?

MAJYD AZIZ: To document the economy it is necessary to provide inducements and incentives rather than making it a cumbersome event. Why should anyone bother to register knowing the difficulties and problems faced by those in the tax net. The past history is full of examples where only those who were registered suffered. The Finance Minister must address this issue. The present backbreaking 15-18% rate is criminal, it leads to temptation to evade, and is keeping traders and industrialists from registering under the system. The GST must be enforced with determination and must be broad-based with all links in the chain covered. But, more importantly, it is imperative that the GST rate is reduced to not more than 5% otherwise, this scheme will be difficult to implement and will remain hostage to the corruption syndrome.



PAGE: What are the major impediments to exports?

MAJYD AZIZ: The question which is of significant importance, is whether Pakistan will be able to formulate a pragmatic, workable, and effective export policy or whether there will be a continuation of the adherence to the present dilly-dally attitude towards exports. It should be noted that although exports are not the only panacea for the economic development of any country, the case for Pakistan takes on a very profound understanding of the critical need to expand the export base. Pakistan, like other developing countries, will be compelled to fundamentally restructure her mode of manufacturing for the world market. The present ad-hoc policies of the administration, the rigid nature of government officials, and the plethora of bottlenecks and hurdles in matters of exports, have been classic deterrents in boosting the nation's exports all these years.

PAGE: How important is it to find new export markets?

MAJYD AZIZ: It is imperative that the concentration of the manufacturers should be based on product and market diversification. Pakistani exporters can develop relations with businessmen in Africa, and even Burma, to explore possibilities of joint ventures. Pakistan must target the African market on an imperative basis. As it is, 68% of Pakistan's exports are limited to just ten countries. Pakistan's share of the global export market of nearly US$ seven trillion is only 0.15%. Pakistan exports 57% to the developed countries while only 3% to the other SAARC countries.

PAGE: What can explain the low productivity?

MAJYD AZIZ: Over the past decades, scant attention was paid to the concepts of productivity and it was generally relegated to a low priority within the organizations. The effect of low productivity was one prime reason for missed deadlines, for product deficiency, and for cost over-runs. The garment exporters in Pakistan are more abundant in the small and medium sector. One characteristic of these units is that most of their workforce is employed under a contract system. This means that a designated contractor is the primary employer and the units in which these workers produce goods are secondary employers. The result has been that though there has been more productivity through contract workers, the toll on these workers' lives has been considerable. Even though the remuneration of the contract workers is based on output, the fact of the matter is that these workers do not receive other fringe benefits, such as statutory bonus, gratuity, social security, EOBI, and job security.



PAGE: Are we prepared for the WTO?

MAJYD AZIZ: The challenges of the new world trade system would unleash all external forces that could become overwhelming factors in becoming obstacles to a smooth trading scenario. Pakistan has an opportunity to survive and compete in the quota-free environment. The three important factors that the exporters must adhere to and must religiously subscribe to are Compatibility, Competitiveness, and Credibility. The exporters, on an individual level, and the employers' and workers' associations and government, on a collective level, must initiate programs and strategies to focus on the achievements of the three Cs.