Feb 14 - 20, 20

Pakistan Business Council (PBC), a private sector business advocacy-cum-think tank, set in 2005 by 28 largest business houses including multinationals. To ensure that the PBC has the widest representation of progressive business views, only one company can represent a group.

One of the founding objectives of the PBC is interacting with the government legislature and various regulatory bodies to improve the macro business environment of the country.

In its latest meeting held last week, PBC has identified four macro business environment issues including consolidation of industry in Pakistan, a level playing field for industry, broadening the tax base and development of human capital in Pakistan.


The council has rightly pointed out that unless our industry operates at the level of economy of the scale it would always be difficult for us to attain competitive price of the products in the export market. The lack of scale has severely hampered the competitiveness of the Pakistani firm's vis--vis competitors in the regional and global markets. This means that critical investments in the technology upgrades, human resource training, and R&D have not occurred. This lack of investment has translated into not only a loss of market share for Pakistani exporters in the international markets but also harms for sales in domestic markets where they have steadily lost market shares to foreign goods.

Increasingly the large Pakistani manufacturing concerns look like cottage industries in comparison to their regional and global competitors. This was not always the case and during 60s, the nascent Pakistani conglomerates were labeled as some of the most progressive in the region.

It may be recalled that in the Finance Act 2007, the government had allowed the concept of group relief for the first time in Pakistan and that law was widely hailed by international experts as the most progressive in the region. However, in the interim period some operational flaws surfaced that require to be addressed at the earliest to shape the industries into large scale groups.


It is important to note that UNDP'S latest Human Development Index (HDI) ranks Pakistan 144th out of total 178 countries. According to UNDP, Pakistan faced enormous challenges, including poverty, poor healthcare facilities, illiteracy, and a continuously mushrooming population. With a population in excess of 180 million of which 40 percent is less than 15 years of age, Pakistan is sitting on either a population bomb or a population gold mine. The tremendous potential that this young population offers is paramount to be realized.

In the backdrop, Pakistan Business Council has come out to respond to the call of the hour and focuses on what the private sector can do to contribute to the near, medium and long term development of human capital in Pakistan.

Though PBC alone cannot take on the mantle of reforming the entire education system, but it is confident that given the right policies it can improve the human capital that directly impacts the competitiveness of firms in the formal sector-this thinking on the part of PBC is certainly a silver lining for the young population, which looks depressed for want of any direction towards a better life at the moment.

It is painful to note that the government collects billions of rupees every year under the heads of the workers profit participation fund and the workers welfare fund. This amount to seven per cent of profits is not accounted for and for the most part is wasted. On the back of this waste of national resources, PBC has suggested that listed companies may be allowed to retain 50 percent of the contribution that they pay under the heads of workers profit participation fund and the workers welfare fund. This 50 percent retained by the companies must be spent on welfare and development of their workers

Besides these two concrete suggestions, the council has also urged the policymakers in the parliament to finalize the economic reform agenda urgently and start its implementation. It supports the multi-parties dialogue on economic reforms.

PBC & its members expressed their concerns at the prevailing economic situation in Pakistan. It was elaborated that PBC has been greatly encouraged by the initiatives, taken by the government of Pakistan and the political parties in Parliament, to initiate a dialogue to develop consensus for a national economic agenda.

While the economic problems are perennial and complex, PBC sincerely hopes that the process of dialogue will lead to urgent and effective measures. Pakistan Business Council strongly supports this political dialogue and suggests some recommendations for the formulation of the core of national economic agenda.

The first recommendation was that on a war footing the government needs to address the severe energy crisis by taking critical reform decisions which tackle pricing distortions; production & distribution inefficiencies; remove bottlenecks for urgently needed imports and develop the indigenous energy resources.

PBC also proposed the government to take urgent and concrete steps to sharply reduce public finance deficits by overhauling the tax and tariff structure and bring all sectors into a uniform documented tax net.

Further, it recommended reforming and restructuring public sector enterprises, starting with the transparent appointment of capable / professional top management and boards which would be empowered to take the necessary actions; eliminating waste in government expenditure and phasing out broad based non targeted subsidies which unnecessarily benefit the well-off also.

PCB members urged the government to significantly increase education, health, and income support expenditures (targeted subsidies) for the most vulnerable segments of the society.


Pakistan's economy is endowed with exceptional human and natural resources. Given the right policy environment, Pakistan can become a dynamic economy, which meets the aspirations of all its citizens in not too distant a future.