Prerequisite to compete in the world market



Feb 14 - 20, 2005



Dr Mirza Ikhtiar Baig

Dr Mirza Ikhtiar Baig, is Chief Executive Officer of Baig Group of Industries, a multinational conglomerate engaged in diversified industrial and commercial activities such as spinning, denim textile manufacturing, leasing & financial services, digital imaging, precision engineering and electronic media, operating in Pakistan, UAE and Morocco. Dr Baig did his bachelors and masters from DJ Science College and Karachi University and MBA in corporate finance and marketing from USA, and Doctorate in Business Administration from the American University of Hawaii. Dr. Baig's par-excellence a rich background of international exposure to the realms of finance and marketing.

As a high profile industrialist in Pakistan and abroad, he has rendered invaluable contribution in the attracting foreign investment and in revival of sick industries in Pakistan. In recognition of his intrinsic worth, he was conferred prestigious award by no less than the Prime Minister and the President of Pakistan. He is a life member and Chairman of Banking Credit and Finance of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), the apex body of trade and industry of Pakistan and also recently elected as senior Vice Chairman of SITE Association of Trade and Industry, the largest and the oldest trade and industry association in Pakistan. As he never sets any limit to his involvements, he also takes part in various associations as under; Member, Sindh Privatization Commission; Member, Steering Committee on Investment; Member, Credit Advisory Committee, State Bank of Pakistan. And Vice Chairman, Pakistan Denim Manufacturing and Exporters Association (PDMEA)

Dr Baig is an eminent economist and regularly writes articles on current economic issues in dailies of Pakistan. His proposals and recommendations on investment, industrialization, exports and other national economic issues in media have been "Shah Rug' a book he wrote on the current national and international economic issues, launched by the Prime Minister of Pakistan Shaukat Aziz. The book has received a tremendous response.

SITE Association of Industry, the largest industrial zone of Pakistan with more than 2,520 industrial units, has signed 'Memorandum of Understandings (MoUs) with the counterpart trade bodies of India, Poland and Bangladesh early this month.

Besides signing MoUs, more major steps were also in the pipeline aimed at promoting Pakistani products in international market, said Dr Mirza Ikhtiar Beg, newly elected chairman of SITE Association of Industry, who carries various distinctions to his credit as an economist, industrialist as well as having knack in journalism.

The MoUs signed with India are more significant in the light of changing economic scenario in the backdrop of WTO challenges. The MoUs are expected to increase bilateral trade among the signatories apart from streamlining exchange of trade information. The salient features of the MoUs include both the organizations keeping in view the time-tested, pragmatic and advantageous relationship of both the countries desire to further cement the ties by renewing friendly and cordial relations through an increased cooperation mode among the industrialists, businessmen and entrepreneurs of the two countries.

Provided, the two organizations agreed that there should be a growth in interaction between them and that this accord should be mutually favorable to both the organizations. Whereas the two organizations agreed that it is imperative that there be dissemination of information that could lead to further increase in trade between members of the two organizations. Two organizations agreed that efforts be made to establish joint ventures, provide technical expertise and arrange visits by members of the two organizations. The MoUs intended to be a trailblazer and acknowledges the importance of mutual and beneficial trade, cooperation and relationship between the members of the both organizations.

"The Sindh Industrial Trade Estate (SITE) spread over 4,700 acres of land generates 40 percent revenue of the total revenue of Pakistan which is currently facing multiple crisis. The sudden increase in the POL, gas, and electricity has virtually disturbed all the priorities," said Dr Mirza Ikhtiar Baig.

He said that the recent increase in prices including electricity, gas and POL products has virtually given a serious jolt to otherwise growing national economy.



In fact this has created a sense of uncertainty as under the prevailing unpredictable situation it has rendered the industrial consumers in a state where "we don't know what would happen tomorrow". The immediate concern of the industrial sector is that serious steps should be taken for change in the Oil Companies Advisory Committee (OCAC) pricing mechanism which reviews price level every fortnight. This period is too short and needed to be enlarged at least over one year or six months for price revision. This would help us for forward trading contract and future planning.

Apart from a jolt by the tariff increase, the on going load shedding by the KESC was another major issue for the industrial units. The transmission and distribution system of the KESC is so poor that more than 366 industries trip down in one stroke for two to three hours almost every day, this load shedding spell was started in November, 2004 and unfortunately continues to persists. For the last few years, KESC has been working under the supervision of army personnel yet there is no visible improvement in the operational results of the utility corporation as the chronic problem of load shedding continues to exist; the consumers are usually given mere assurances and promises. In fact, the poor infrastructure was in its worst condition and unable to sustain the load pressures. Under the prevailing situation there is no option but to fully support the privatization of KESC with the hopes of getting things improved.

The SITE Chairman alleged that City District Government Karachi has also neglected the industrial area and without any reason consequently doing no justice with more than 500,000 employees earned their bread and butter from this industrial zone.

There were environmental problems posing serious threat to the entire SITE area. Conceding that SITE's external look does not correspond with the factories inside look, the SITE Chairman revealed that process of beautification of the outer look of the SITE industrial area was on top of the agenda. However, the indifferent attitude of the city government towards infrastructural improvement in SITE Industrial has seriously hit this important economic zone. Though industrial representatives succeeded in restoration of 8-MGD supply of water to SITE Area, however, the KW&SB authorities failed to maintain the supply of agreed amount of water to SITE area due to public pressure and negative attitude of the City Government. "Our efforts for augmentation and procurement of water even for export-oriented industries especially the textile units proved futile despite hue and cry raised by the industrial consumers."

Explaining the current situation pertaining to environment and improvement of water supply, he observed that there were three projects identified as (i) Up-gradation of existing Sub-Soil Water Scheme; (ii) Domestic Effluent Treatment Plant at TP-I (Gutter Baghicha) and (iii) Combined Effluent Treatment Plant at TP-III (Hawksbay) which is lying incomplete due to apathy of the CDGK.

In the face of the free global trade realities, the SITE Association has decided to utilize the powerful and the accepted clout of SITE Association of Industry to bring in the economic prosperity for the people of Pakistan.

The SITE Association has started forming a think-tank comprised of its members, leading economists and other concerned personalities to recommend initiatives on national industrial policy, federal trade policy, federal/provincial budgets, DTRE, etc., for constructive consideration by the government.

Talking about future plans of the SITE Association, Dr Ikhtiar Baig said Pakistan is poised to be an active player in the WTO regime. The textile sector would continue to be the mainstay of the economy and the backbone of the export sector. The time has come when we must ensure international exposure of textile products, which contributes over 67 percent to our total exports, generates 40 percent of our total employment and nearly 10 percent of the GDP.

In order to compete on our terms in the export world and to expand our declared niche, we have to struggle for building up our physical infrastructure on a fast track. Our power rates are backbreaking and there is always this Damocles Sword of power outages and load shedding on us, he said. Water is a scarce commodity for our area. We have to be ever ready with baited breath for another increase in gas prices. Oil prices are again susceptible to international markets and policies of oil companies. At the same time, effluent treatment plants are brightly depicted in feasibility reports but in actuality these are just pipe dreams. NEPRA, OGRA, OCAC and their ilk have assumed demonic powers on our industries. Therefore, it is imperative that we forcefully take on the issue of infrastructure with the top governmental hierarchy so that we are functionally armored to combat the tough international competition of our products.

He said he is contemplating modalities of setting in motion the programme to undertake foreign tours for delegations of SITE industrialists to market their products for promoting their goods and for attracting investment in this area. The association prevailed upon the EPB, BOI and even the Prime Minister's secretariat to involve the association in this sphere. He said he intend to increase the interaction with the diplomatic community and the international agencies. This helps us in projecting our point of view in a favorable environment and enables us to assist members in trade inquiries, consular services, and information dissemination. The second macro objective is to take advantage of the clout of the association and its senior members and to transform this edge into attaining the desired objectives. We have to strive for maximum representation of SITE Association of Industry on all essential forums. The Association directly represents on the board of directors of KESC and SITE Limited and indirectly on the boards of EOBI, SESSI, KPT, and a host of other committees and agencies.

He said he would now take up strongly the case for direct representation on KW&SB, SSGC, and PTCL and in city and province boards. He said he will lobby to get the Sindh privatization commission, the provincial committee on investment and other such organizations that are now lifeless or inactive rejuvenated and working pragmatically for the cause of industry.

Baig said smuggling, under-invoicing, and wrong declaration of imported goods are eating away the base of Pakistan's industry. President Pervez Musharraf recently stated that he was not in favor of abundant and unbridled imports of finished goods in the country. He was not in favor of unwarranted and negative competition for local products. He was not in favor of loss of precious jobs due to closure of domestic industries. He said he would support and echo his thoughts and sentiments. He said he wants to involve multinationals, big corporations and prominent industrialists of SITE Association activities. The office building is in need of a large-scale renovation and refurbishing. We would again indulge in the process of commencing the construction of the industry house.

He said he needs substantial funds to start these programmes. The executive committee in consultation with senior leaders would chalk out a strategy so that we can organize a fund-raising drive for these projects.

The in-house journal "Voice of Industry" would be published with regularity and be an avenue for raising financial resources also. The new SAI chief said he intend to inculcate the system of accountability in the working of the sub-committees. There would now be a performance-oriented structure, and every sub-committee chairman must have a working team, must hold periodic meetings, must give frequent reports, and must communicate with members so that the day-to-day load of the association is in practical motion.

He said that he plan to involve the membership through meetings with high officials. We propose to organize social programmes and get-togethers for industrialists and their families, and we prefer to pre-empt and tackle problems before they become difficult and out of control for our members. Dr Mirza Ikhtiar Baig said he intend to initiate a process where there is fundamental change in the workings of even SITE Limited since this organization has lately been susceptible to negative influences and negative publicity. He said the association would again introduce the concept of excellence awards to be presented at a glittering function to be graced by either the President or the Prime Minister. These awards would carry positive authority and would denote true excellence and achievement of our members.