AN INTERVIEW WITH LCCI PRESIDENT MIAN MUZAFFAR ALI

'PAKISTAN HAS TREMENDOUS POTENTIAL TO BECOMING LEADING EMERGING ECONOMY

KANWAL SALEEM
May 11 - 17, 2009

The Lahore Chamber of Commerce and Industry (LCCI) was established by the businessmen and industrialists of Northern India in 1923 under the name of "Northern India Chamber of Commerce and Industry." In 1947 on creation of "The Islamic Republic of Pakistan," its name was changed to "West Pakistan Chamber of Commerce and Industry." In 1960, the present name, "The Lahore chamber of commerce and Industry" was adopted. Today, the chamber stands out as the first ISO-certified chamber of Pakistan.

The LCCI's prime objective is to serve its members to their utmost satisfaction. It is committed to making an effective contribution to the nation's economic development through the promotion of trade and industry. The LCCI acts as a bridge between the government and the business community. It plays an important role in policy formulation by maintaining a constant interaction with the relevant authorities.

A leading businessperson Mian Muzaffar Ali is sitting President of the Lahore Chamber of Commerce and Industry. In an exclusive interview with Pakistan and Gulf Economist, Mian Muzaffar Ali shared his views about the manifold challenges posed to the country's economy.

He said, "Pakistan as a nation has tremendous potential to be one of the leading emerging economies but lack of a strategic plan has thrown it into the bucket of the most economically and socially challenged countries. And there is a dire need that both the public and private sectors should put their acts together to make the policies result oriented in the true sense of the word."

A soft-spoken Mian Muzaffar Ali, who looked disturbed over the ongoing economic meltdown, said Pakistan is at crossroads because it faced with either a liquidity crisis or a solvency crisis. "Even though Pakistan is not alone in experiencing widening external and fiscal deficits and wide ranging inflationary pressures, political instability is hitting hard to the country's economy," he added. "We, I, strongly believe, today hold the uttermost responsibility to deliver or else fall into oblivion. We need to stop borrowing a few breaths in the form of 6-12 month interim relief funding from the donors just so we can go on for a few more steps yet not look for the cure for what we are plagued with. We understand that interim relief might be absolutely necessary for right now to continue, we need to start thinking of a long-term solution to our ills. We need to start somewhere and although the ride to economic stability will be long and rough, if determined, sincere and honest, we will get there. Sooner or later we need to start putting an end to our deficits because all I know if that consistent and persistent deficits (internal or external) cannot go on forever. The longer they persist, the higher is the probability that the house of cards will fall. The higher is the probability that our borrowed and artificially elevated standard of living as a country will one day need to readjust to economic realities," he said. Talking about the slow pace of industrialization, the LCCI President said, "Pakistan's history of industrial development has had a chequered past. It has been a story with many ups and downs, many climaxes and anti-climaxes. In the last 60 years, our national policies have moved from private to public and back again to private ownership. The nation started with a narrow industrial base at the time of independence. This thin base has gradually grown in size and today we have certain heavy and basic Industries like steel, fertilizers, cement, and chemicals amongst others."

In the engineering sector, he said, "we have begun to make ships, plants for sugar, cement, and other engineering products. Our survival, I believe, as a nation hinges on the need to recognize this fact and on the future pace of our industrial development. Our population growth rate surpasses many others. This is at least one sector in which Pakistan is near the top of the table. We today are a nation of 160 million. If we continue to grow at the present rate we will be twice this number in the next 20 years. Unemployment is already a cause of serious concern. Unless we take effective measures to control this population explosion and at the same time create job opportunities for those to come through a process of rapid industrialization, the results are visibly apparent. We can look forward to a dismal and chaotic future," he added.

The LCCI President said, "Our economy is in a state of despair. The budgetary deficit widens with each passing year. The governments' resources are insufficient to meet even its non-development recurring expenditure what to speak of development expenditure. Over the years, this policy of deficit financing has enlarged the size of our national and foreign debt to alarmingly high levels. Its strains are no longer hidden."

He further said, "We must have political stability, if we are to industrialize. Political stability can only come with political maturity. Our politicians must now attempt to raise the stature and level of their politics from the present day classroom type boyish squabbles to more constructive criticism of their opponents." To make self-reliance a reality, we must be sincere in our decisions and prepare ourselves for some real hard work. Decisions based on vested interests must be shed and merit and sincerity must prevail in all cases, he said.

He further said that institutions of accountability such as the judiciary and the press must be strengthened. These institutions provide checks and balances in any developed society. In their strength also lies our political stability, he said.

Talking about value added exports, he said one of specific economic priorities we must set for ourselves is to achieve a decisive export orientation of our industrial sector. To give an example, Pakistan produces on the average 10% of the world cotton but its share in the world textile trade is hardly about 1%. About 82-percent of the textile and clothing export came from countries, which hardly produce any cotton. Pakistan presently exports yarn in which the value added is not significant. We must convert this yarn into cloth or garments to increase our export significantly in this sector, he said.

Talking about law and order situation, the LCCI President said the law and order situation is indeed alarming these days. "We seem to have lost our sense of direction. We will have to develop such a political and judicial system, in which the common citizen must be assured of the safety of his person and property," he added. We cannot achieve economic development in a situation when people cannot properly sleep due to fear of some untoward happening in the surroundings, he said. In this regard, mere expression of good intentions is not going to work and some strong measures would have to be adopted to provide necessary peace of mind to the people to put in their best efforts towards the glorification of this nation, he said.

Answering a question, he said the basic attraction to a businessperson is the return he gets on his investment. Thailand, Korea, Malaysia and Singapore, these tigers of the East offer these haven like conditions. We must learn, implement and do the same if we are to move forward and make Pakistan ready for the multidimensional challenges. It is not the size of the country but its economic strength in the end that matters. Strong economy lies a strong Pakistan, he added.