Aug 17 - 23, 2009

Federal Minister for Finance Shuakat Tarin has subscribed to the idea of charter for economic growth to be signed by all political parties and that will bind them not to tinker with the process of economic reforms started by predecessors while in the helm of state affairs. Senior industrial expert Siraj Kasim Teli pronounced the idea in tatter during the 62nd celebration of Independence Day by ruling Businessmen Group of Karachi Chamber of Commerce and Industry.

"I am thinking aloud," said senior industrialist Siraj Kasim Teli, adding the main reason of destruction of institutions in the country that every government when comes in to power does not complement previous one, would be quashed away only if haphazard change in policies be banned. He appealed for a like of Charter of Democracy.

Newly appointed federal minister appreciated the idea, saying all political parties build consensus on charter for economic growth. 'This charter should be applicable on everyone.' He said governance must be improved not by individuals but by institutions. What he called governance deficit, he said, was because, 'we override rules'. What we have done to our institutions? Planning commission, which had been a frame of reference for economic policymaking of Korea, now reduced to just a project designer, he lamented. He informed about plan to take IMF technical assistance for institutional capacity building. We will try making link between local statistics division and Germany statistics for example, he suggested.

The Minister said government was taking hard-line with KESC. We ordered the company to fulfil the commitment it made to invest $360 million and that it makes execution of investment plan transparently. 'It [KESC] would refurbish [distribution networks of] 18 towns by June.' He said issue of cross-subsidization would be resolved after revision of power tariffs.

With reference to exports target set in the trade policy 2009-12, he said we were looking for $100 billion exports. "We are looking for $100 billion exports," he said, "If cotton grows at an annual rate of five percent textile exports of $75 billion is achievable". Government envisages increasing textile exports to $25 billion from current over $17 billion a year in a five-year textile policy announced recently. Minister said European Union agreed to discuss GSP Plus status for Pakistan. The talks would be held in December, he revealed. "For a change, USA has uttered 'let's talk on market access". He informed about his meeting with Obama in which he urged upon president USA to give Pakistani products greater market access to USA.

There is a caveat, said the Minister. 'Until policies are implemented, they are a piece of document.' "But, let me clarify here that now policies are of inclusion and participation instead of exclusion," he assured business community. 'My government,' he interjected, 'especially my focus is to take business community on board.' He reiterated the importance of private consultation in policymaking. We have planned industry-specific business council with representation from particular industry and ministry, said he adding it would perform as 'Jirga'.

Government set 10.6 percent tax to GDP target in this budget. He said agriculture and stock market would be brought into the tax net, 'not by force'. "Every person with income has to pay tax," he uttered with conviction. Is it not an irony that manufacturing sector is sustaining 60 percent of total tax load, enquired the minister. He agreed upward revised CVT from 2 to 4 percent on property was regressive. He said deliberation on National Finance Commission would be completed by next month, saying most of the issues would be settled in it. Using a parlance to describe authority of FBR, he said, 'thanedari' of FBR should be shared with business community. He wanted scrutiny of executives of SECP, SBP and other apex bodies by the parliament, which he bewailed, reduced to debating society.

Zubair Motiwala, Investment Advisor to Sindh Chief Minister said government had overlooked one serious problem affecting large scale manufacturing sector as it had rectified 73 budget anomalies. That problem is SRO 603, he observed. While explaining he said when buyer purchased inputs from unregistered taxpayer he had to bear the cost. 'One could not deduct withholding tax from unregistered seller.' He said industries were performing in worst kind of situation and bearing high-energy costs and unnatural financial charges in comparison to the region. He invited government to evaluate cost of doing business chart.

He expressed his gratification over textile policy. The policy is wonderful, he said and adding $25 billion is not a tough target. We would achieve it,' he said, 'Rather with unremitted support of government the exports would double within two years'. Textile policy has comprehensively touched every sector from growers to rescheduling of loan to duty drawbacks, he opined and saying it will result in industrial expansion, enhancement of exports, productivity improvement of cotton, and value addition. He appreciated allocation of outstanding payment of Rs5.4 billion on account of R&D. We have ensured solution of problems of business community related to law and order by setting up a council. Now, any complain pertaining to extortion, etc. will be entertained at chief ministerial level.

Anjum Nisar, President KCCI said growth of 1.8 percent in next year would be invalidated by population growth with the same percentage. He said 72 post-budget anomalies had been removed, making business community now to concentrate full attention on business activities. He termed textile policy excellent. He said there was a need to improve tax to GDP ratio, which, he added, was short of target last year. Annual income of and over Rs200,000 must be taxed, he suggested.

BMG celebrated golden jubilee of KCCI, which was established in 1959. Mohandas Karamchand Gandhi inaugurated the building 75-years ago. MA Jabbar, Mohamad Ali, Haroon Khaliq, Haroon Farooq, Jawed Bilawani, and industrialists attended the dual celebrations.