Dec 7 - 13, 2009

Majyd Aziz, a prominent business leader, former President Karachi Chamber of Commerce & Industry (KCCI) and former Chairman SITE Association of Industry recently visited the USA with a trade delegation invited by the US Trade Development Authority.

Having a deep insight on national economy, Majyd feels that the road to growth of exports has become dilapidated in the wake of homemade problems and international prejudices, and because of uncertain situation prevailing in the country for quite some time.

When asked whether Pakistan will meet the export target set for 2009-10, he came out with a candid reply, "taking into account the difficult circumstances, such as the melting of the US economy, the non-availability of GSP Plus status for Pakistani from the EU, the pressure on regional competitors to maintain their export share in USA and EU, the ever-increasing infrastructure rates in Pakistan, the still negative image of Pakistan in western countries, the uncertainty in the political arena, and the load management of gas and electricity, it would be a herculean task to achieve the export target.

However, since the beginning of November there has been a revival of the textile-spinning sector. Though beneficial for the spinners, it is affecting negatively on the textile made-ups. Resultantly, the value added sector is hard pressed to maintain cost competitiveness, and this would be reflected especially after the Christmas season.

Moreover, the advent of VAT by replacing GST would definitely hurt the textile sector.

Commenting on the impact of exorbitant prices of gas, electricity, and petroleum products on the cost of production he said, "Undoubtedly this has been evident in the decline in textile value added products. For the first time in the history of Pakistan, a finance minister has slated the dates when rates of electricity and gas would be enhanced. The fact of the matter is that with load mismanagement becoming a routine feature, with high input costs, with additional pressure on the currency, and with the fear of petroleum prices being in an upward mode, it is equal to impossible that the exporters can be cost-effective.

As stated earlier, the slack in western demand has affected Bangladesh, Sri Lanka, India, and other regional countries but their governments have adopted a proactive and preemptive position to maintain the viability of the exporters. Pakistani policymakers are still undecided on how to sustain the survival of the domestic exporters.

It is imperative that the government should ensure that a facilitative environment is available for the exporters. Even last year, the country faced the ignominy because of decrease in net exports. Even if the nation achieves the export target, and this is a big IF, the overall situation would still be difficult for the exporters.

The exporters are murmuring that a massive layoff or retrenchment of workers might be possible and this is undesirable. Cost of doing business should be the focused priority of the government. This would prop up the manufacturing sector in the end.

Regarding trade relations with India, Majyd Aziz remarked, "you are talking to someone who is a strong supporter of regional trade. I am the first industrialist to advocate MFN status for India. Why should we pay exorbitant shipping charges when we can get a comparable quality from the eastern neighbor? Why are the governments of both the countries ready to support smuggling and undocumented trade? How come billions of rupees worth of Indian goods are brought into Pakistan across the border or thru third countries? The fact of the matter is that those who indulge in this undocumented trade, the rabble-rouser, and those who do not want Pakistan to prosper are creating roadblocks and make loud noises for an end to Indo-Pak trade because it would hurt them more than the citizens of the sub-continent."

The business community is not afraid to enter into trade with Indian counterparts. We even initiated exports of cement to India. When we need milk powder, meat, potatoes and onions then we open up the Wagah border and when India needs sugar or cement we rush with our order books. Why should we not have an organized and well-placed trade regime?

We are SAARC members, we understand a popular language, and we have social contacts, so why not we benefit. Indian movies are allowed, Indian music is heard everywhere, Indian programs are telecast on the private channels. IT training institutes with foreign collaboration are everywhere.

"The irony is that Indian origin professionals own most of these foreign firms, but when it comes to organized trade, we start hue and cry. Let us not be hypocrites. Let us become strong global players. We have to look towards the future. Our best feat is intra-SAARC trade. By the way, India really does not give an owl's hoot whether we give it MFN status or not."

Discussing the role of the IMF in the economy of Pakistan, Majyd Aziz said, "Pakistan's economy is remote controlled by IMF, ADB, World Bank, and I don't know who else. That is what the economic czars of the country tell us whenever they want to enhance the rates or bring in so-called structural reforms. When IMF is ready to dole out loans in double figures, it is not giving us a free lunch. We have to navigate our policymaking through the bureaucratic maze it lays down for us. And, the funny part is that when the IMF strongmen want to check our books, the whole economic team has to go to Dubai or Timbuktu with folded hands to appear before the IMF team. Sad fact of life."

"I am sure the IMF boys do their homework well because when our team comes back, they are ready to announce rate increases, wring the necks of businessmen by FBR, and release fillers in the press that a mini-budget is in the pipeline. Of course, one should not really blame the finance minister. He knows but no one in the political arena is listening to him. Non-development expenses, it seems, have become sacrosanct."

Defence expenditure is no more the holy cow. Non-development expenditure is the new holy cow and of course, populist measures and schemes are announced to fool the gullible 170 million denizens. This charade will continue because no one among the citizens wants to do anything. In short, IMF rules and we obey."


"Bad news from Pakistan is decreasing and we Pakistani businessmen are on a go-forward basis in investing and enhancing our exposure in Pakistan. There is going to be a fundamental structural change in the nation's economy as Pakistan is about to rebound. We believe that this is the big opportunity to shine and we do not want to miss the boat. Therefore, now is the time to Think Pakistan and now is the time to invest in Pakistan."

Majyd Aziz stated this in a passionate speech recently at the United States Trade Development Agency in Washington D.C.

Majyd Aziz, who was part of the ten member Pakistani delegation invited by USTDA for a ten-day Pakistan Intermodal Freight Transportation Orientation Visit, further said that the government is formulating an investor-friendly and country-specific Special Economic Zones Policy to facilitate the foreign companies.

He gave the example of the Japan SEZ being set up in Karachi. He also advised the American investors to participate in setting up the Karachi Mass Transit Rail system since many foreign companies have shown interests in the project.

Majyd Aziz added that there are many sectors in which American investment is required and which can be very lucrative for them.

He said that Pakistan is placing greater emphasis on coal based power plants, livestock, and dairy farming, transportation such as railroads and trucking, medical technology, chrome ore and marble mining, and oil and gas development, etc. Moreover, under the Kerry-Lugar Act, a substantial amount would be earmarked for social infrastructure development and thus American construction companies can participate in construction of hospitals and schools. He said that water shortage is of major concern and the country needs latest technology in water conservation and purification. He also advised them to look into alternate and renewable energy projects that are of vital importance to Pakistan.

The delegation comprising of representatives from the private and public sectors also participated in the Intermodal Expo and Transcomp Exhibition held at the Anaheim California Convention Center as special guests of the National Industrial Transportation League.

Speaking on behalf of the Pakistan delegation at the luncheon, Majyd Aziz said that today Pakistan is Page One news and is open for business. He said we are good partners and we also need to be treated with respect. He said that Pakistan needs the new innovative technology being developed in USA and that the Pakistani workers and technicians are capable of learning and operating the latest technology. He said that the United States has decades of experience in coal technology while Pakistan with its vast reserves needs expertise in developing the economic viability of coal. He called for joint ventures in the transportation sector and stated that with the economy growing at a faster pace, Pakistan needs more locomotive engines, rail cars, signaling system, and latest trucks.

He said there is going to be an acute shortage of trucks and the Americans must enter in to this field in Pakistan. He said that the National Trade Corridor is a visionary policy of the government and this would open new vistas for investment in the trucking sector.

The delegation also visited Port of Los Angeles and Port of Long Beach in California, Port of Virginia in Norfolk, and the Virginia International Terminals in Front Royal Virginia where they were given extensive briefings on the workings of the ports. The delegation also visited Washington where they met American investors at USTDA and also visited Ex-Im Bank, OPIC, World Bank, and other organizations.

The Chairman and President of Ex-Im Bank personally welcomed the delegation at the Bank and expressed his desire to promote and finance projects in Pakistan. The delegation's visit was coordinated and planned by The Cornell Group of Washington.


The total liquid foreign reserves held by the country stood at $ 13,720.0 million on 28th November, 2009.
The break-up of the foreign reserves position is as under: -

i) Foreign reserves held by the State Bank of Pakistan: $ 10,135.9 million
ii) Net foreign reserves held by banks (other than SBP): $ 3,584.1 million
iii) Total liquid foreign reserves: $ 13,720.0 million