THE investors are showing clear signs of nervousness. The industry, however, with higher stakes in the economy, seems ready to bend backwards to adjust and strive with vigour for a better tomorrow.

Softening their tone in discussions over economic challenges being faced by businesses amidst sky-rocketing input costs and shrinking markets, the corporate Pakistan expresses its resolve to lend support to the Gilani government to realise the growth target in the year ahead, provided the government keeps them on board in matters of their concern.

The textile tycoons, for once, are talking about market, productivity, competitiveness and even playing field. They do not plead for more subsidies but demanded fair treatment of all sectors and all business groups irrespective of their size and political clout.

The cement sector did complain of a breach of trust as the coalition government did not honour the commitment of the Shaukat Aziz government. The sector was assured by the last government of excise duty reduction each year before phasing it out completely over the next few years. In the current budget, the excise duty on cement has been increased.

The auto sector was cautious and advocated ‘localisation’ in place of globalisation. They advocated the case of protection through tariff and non-tariff barriers to the local industry.

The pharmaceutical sector complained of neglect of the “star performer” by dumping it with the ministry of health that they said is devoid of vision to appreciate problems faced by an industry.

The dip in the capital market and falling real estate prices along with low level of turnover in these sectors indicate that investors find the risk factor prohibitive at this point in time. They do not seem to be too inclined to commit their savings, even for short-term investment avenues of stocks and real estates, viewing the political situation and worsening macroeconomic indicators particularly of falling currency and rising inflation.

The behavior of industry is different from short-term investors.

“Truly scared, as the government capacity to compensate for their professional failures deplete, the private sector seems to be in the process of learning to stand on its own. Their chances to succeed, however, would improve if they induct professional management and invest in intangibles such as human resources and marketing research and development”, said a senior economist.

“Attaining the critical mass is the answer. The private sector is too focused on profit margins. They need to consolidate to achieve scales to survive and compete”, said a senior banker involved in project financing.

Iqbal Ibrahim, Chairman, All Pakistan Textile Mills Association (APTMA) favoured pragmatic but even- handed policies towards industry.

“We understand the pressures the government is faced with and willing to cooperate to ride out the challenge. We can survive without subsidies but not without energy supply and markets. The government must treat all sectors at par and ensure an even playing field”, he said.

“The economic policies need to be prudent and long-term, based not on subjective viewpoint but on objective reality. We are happy that we have been consulted before the budget and government has committed to assure uninterrupted supply of gas and power to the industry”, Mr Illahi said adding, “The government could falter but people can deliver and deliver they will”.

Yousuf Shirazi, a veteran of the auto sector, appreciated the emphasis on agriculture by the coalition government .He advocated localisation of production and consumption to realise growth and prosperity.

On the issue of continuity, he said the broad fundamentals were the same as the PM reiterated— the guiding principles of privatisation, deregulation and liberalisation--- but there were deviations in sectoral policies. He said the duty structure on cars has been revised. He did not commit if the policy changes would benefit or harm the local auto industry.

A senior economist, recently shunted out of an economic cell despite his competence, advocated clear cut sectoral policies free of ambiguities to facilitate businesses to plan their future.

Eijaz Sheikh, Chairman, All Pakistan Cement Manufacturers Association, was mildly critical of the upward revision of excise duty on cement in contrast with the earlier commitment of the government. The excise duty on cement has been raised from Rs750 to Rs900 per tonne.

“The government is under great financial stress. It was beyond them to take the brunt of rising international prices on themselves and was forced to take politically unpopular decisions of hiking energy prices. They must be prudent and even handed”.

Riaz Hussain, a leader of Pharma Bureau grouping of drug multinationals, was all praise for the Gilani government for keeping their commitment of continuity in economic policies.

Qaisar Waheed Sheikh, a leader of local pharma companies, lamented the fact that the high performing drug manufacturing sector did not get the attention it deserved in the budget.

“What do you expect when the pharmaceuticals fall under the ministry of health? We talk French, they speak Latin. There is a huge communication gap as we fail to make health official appreciate the problems and needs of this promising sector. In India they have state sponsored Pharmaceutical Upgradation Fund to assist the sector. In Pakistan pharma companies are charged two per cent of their profits as research fund and there is no FDA accredited testing lab in the country”, he said.

“The government must abstain from patronising one sector at the cost of other besides improving the level of transparency in public expenditure before it expects people and business to deliver under tougher conditions”, said a business leader of Karachi.

Khawaja Shahab Secretary, ministry of industries, noted down questions but was not able to respond in time because of his preoccupation. Secretary finance was busy and could not be reached despite repeated attempts.