INTERVIEW WITH SAEED SHAFIQ, EX-PRESIDENT KCCI
Oct 3 - 9, 2011
Former President Jamiyat Punjabi Sodagaran Delhi (2008)
Former Senior Vice President: Karachi Chamber of Commerce & Industry (2003-2004)
Karachi Iron & Steel Merchants Association (2004-2005)
Member Board of Governors Hamdard University,
Mohammad Ali Jinnah University, Iqra University, Ziauddin Medical University, Baqai Medical University, Sir Syed University of Engineering & Technology, Mehran University of Engineering & Technology, Institute of Business Administration (IBA), Institute of Business Management (IoBM), PAF Karachi Institute of Economics & Technology (PAF-KIET), Karachi Medical & Dental College (KMDC), Indus Institute of Higher Education, Institute of Business & Technology (Biztek), KASB Institute of Information Technology, Preston University, Preston Institute of Management Science & Technology (PIMSAT)
Advisory Committee of Ministry of Commerce, (KCCI Nominee), Advisory Committee of Ministry of Finance (KCCI Nominee), Board of Administrator of Export Development Fund (EDF), Ministry of Commerce (KCCI Nominee), Business Persons Council, Finance Division (KCCI Nominee), Sindh Board of Investment (KCCI Nominee), Sindh Public Procurement Regulatory Authority (SPPRA), Government of Sindh (KCCI Nominee), Community Development Board, Planning & Development Board (KCCI Nominee), Karachi Water & Sewerage Board (KWSB) (KCCI Nominee), Karachi Centre of Dispute Resolution (KCDR) Member BOD.
Sindh unfortunately is facing devastating floods for second consecutive year and this year too floods have caused considerable damage; an estimated 754 civilians died, and 8.83 million people and 1.5 million homes affected . Sindh is a fertile region and it is rightly called "breadbasket" of the country. According to the reports of National Disaster Management Authority, around 6.79 million acre land is inundated, with standing crop on 2.16 million acres also damaged. The floods and rains have affected 23 districts of Sindh resulting huge loss to economy and business. Since Pakistan's export is mostly agro-based, devastating flood is likely to affect textile and rice exports significantly as about more than 50 per cent cotton crop and about 30 per cent rice crop has been destroyed.
PAGE: WHAT ARE YOUR COMMENTS ON THE IMPACT OF RECENT FLOODS AND HEAVY RAINS?
Exporters will face cotton shortage, and we have to import a huge quantity from abroad, which will affect our margin and cost of doing business will be increased. To cope up this situation, I think, the government should reduce the interest and refinance rate to facilitate our exports.
PAGE: WHAT THE BUSINESS COMMUNITY IS DOING FOR THE RAIN AND FLOOD AFFECTED PEOPLE?
SAEED SHAFIQ: Business community at the time of this trial and turmoil is with our affected brothers and we have donated a substantial amount to the government, besides, we are providing relief goods and medicines to flood affectees. This is our moral and social responsibility and we assure our brother that they will not feel themselves alone and deserted we are with them and doing every possible efforts to provide them with relief.
PAGE: TELL US ABOUT YOUR MEETING WITH PRESIDENT ZARDARI?
SAEED SHAFIQ: President Zaradi was very sentimental about the pathetic condition of flood affectees and he wants nation to come out to help their suffering brothers. He appealed to business community to help flood affectees in whatever manner they can do. The business community assured President that it would leave no stone unturned to do needful to help and to provide relief to our suffering brothers. We are by all means with our President and nation is united to fulfill its responsibility and expressed its solidarity with flood affected people.
PAGE: WHAT ARE YOUR VIEWS ABOUT LOSS OF COTTON CROPS IN SINDH AND ITS AFFECTS ON TEXTILE SECTOR?
SAEED SHAFIQ: Textile sector has significance importance in Pakistan's economy. Pakistan is rich in terms of cotton production, the 4th largest in the world, having excellent quality of cotton specially grown along Indus Valley. Textile and apparel industry is considered the backbone of Pakistan. In 2010-11, Pakistan produced 11,460,000 bales of cotton. Cotton is the main cash crop, which contributes significantly to the national economy. It accounts 6.9 per cent of value added in agriculture and 1.4 per cent of GDP. In addition to providing raw material to the local textile industry, the lint cotton is an export item. During 2010-11, the crop was cultivated on an area of 2,689 thousand hectares. Textile accounts about 54 per cent of the country's total exports, 46 per cent of total manufacturing, 38 per cent of total labour force, and 8.5 per cent of total GDP and has US$ 7 billion investment and about five per cent of total market capitalization.
Pakistan is the world's 2nd largest yarn exporter, 3rd largest fabric exporter. Pakistan exported textile goods of about US$12 billion in 2010-11. Textile export grew about 34.2 per cent in 2010-11 as compared to previous year.
This year floods have devastated more than 50 per cent cotton crop in Sindh and subsequently textile sector would suffer significantly and we have to import huge quantity of cotton from abroad which will increase our cost of production, and the profitability of this sector will diminish considerably.
To cope up with this problem, the government should come out to help our export sector and reduce the rate of refinance so that our products may remain competitive in the international markets.
PAGE: HOW DO YOU FORESEE THE ECONOMIC PERFORMANCE OF SINDH IN THIS FISCAL YEAR?
SAEED SHAFIQ: Sindh is Pakistan's second largest province playing a pivotal role in the national economic and development agenda. Sindh's capital Karachi is the financial, industrial, and business hub of the country. Sindh comprises 23 per cent of Pakistan's population and 18 per cent of its land area. It has the highest concentration of urban population at 49 per cent as compared to overall country's average of 32.5 per cent making it the most urbanized province in the country.
Its contribution to the GDP is around 30 per cent. Sindh has been contributing large chunk to the national economy and Karachi's share in Pak revenue is about 68 per cent.
Sindh has 54 per cent of the country's textile units, 45 per cent of its sugar mills, 20 per cent of pulp and paper mills and 35 per cent of edible oil processed locally.
Sindh accounts for 34 per cent of total industrial capacity in large scale manufacturing and 25 per cent of small scale manufacturing. It also contributes about 14 per cent wheat, 30 per cent rice, 30 per cent sugar cane, 25 per cent cotton, and 30 per cent vegetable crops grown in Pakistan. Despite its significant importance and huge potential Sindh's economy is performing below its potential due to many reasons. Bad law and order situation, extortion mafia, frequent strike calls, violence, target killing etc have highly negative affects on its economy. Foreign and national investment declined significantly. Besides, energy crises, load shedding, and water shortage are also affecting badly business and economy. Sindh has huge potential for investment and economic growth if level playing field is provided to business community. We have to abandon the strike culture and have to introduce hardworking and export culture in our country and keep business in top priorities while formulating strategies and making major economic decisions and business community.