Aptma plea to reduce cost of doing business

Updated April 06, 2014

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KARACHI: The All-Pakistan Textile Mills Association has urged the government to make cost of doing business of export-oriented industry compatible with the regional competitors, like India, Bangladesh, Vietnam and Sri Lanka.

In a statement, Aptma chairman Yasin Siddik said that an important component of total business costs is the cost related to socio-economic environment in which business operates.

Due to inefficient and unfriendly socio-economic environment, the cost of operating business in Pakistan is considerably high.

Consequently, he said Pakistani businesses are at a comparative disadvantage in respect of operating costs as compared to their competitors in the region.

In spite of continuous representations by the textile body to the government and policy-makers, no worthwhile effort had been made towards reducing the high cost of doing business.

The main factors of high cost of business in Pakistan are raw material, utilities, finance, human resource, technology, infrastructure and supporting institutions.

The cost competitiveness of business units in Pakistan is comparatively weak and there are no significant positive signs of improvement over the years, he added.

The association chief said that the cost of doing business in Pakistan is increasing day by day and has reached an alarming level making country’s products uncompetitive in the world market.

Electricity and gas tariff and discount rate in Pakistan is much higher than in the regional countries, he maintained.

Referring to discount rate, he said, that discount rate in Pakistan is 10pc, whereas it is 7.75pc in Bangladesh, 8pc in Sri Lanka and 9pc in Indian and Vietnam.

Similarly, per unit electricity tariff in Pakistan is $0.17, $0.13 in India, $0.09, in Bangladesh and Sri Lanka and $0.073 in Vietnam.

As of today, labour wages per hour in Pakistan are $0.51, $0.20 in Bangladesh, $0.22 in Sri Lankd and $0.30 in Vietnam, he added.