KARACHI/LAHORE/ISLAMABAD: While the business community across the country sees a tough road ahead for the incoming government in dealing with a multitude of economic challenges, it is confident Prime Minister Shehbaz Sharif will be able to take the country out of the crisis by engaging with the industry.

Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Idrees said the new government and businessmen needed to interact for the survival of both. Besides domestic issues, the government will be faced with challenges arising from the Russia-Ukraine war and its impact on international trade, as Pakistan’s main buyers are European countries and the US, he said, adding Pakistan would need to devise a strategy to keep its products competitive with their counterparts.

He further believed the new government needed to take notice of the State Bank of Pakistan jacking up the interest rate to 12.25 per cent besides pushing up the export refinance rate.

“The SBP has also not played its role in regulating the exchange rate, leaving the rupee-dollar parity to the market forces. The new government needs to keep a strict check to avoid such practices in the future,” the KCCI chief said.

Want govt to engage with traders to formulate policies, take notice of SBP’s interest rate increase

The new government would also need to take steps to bring down the cost of doing business as well as the duty and tax structure on imported raw materials to reduce the cost of production.

Mr Idrees said the Imran Khan government had forgotten the economic importance of Karachi which was further compounded by massive gas shortages in the industrial areas even though the city provides 67pc revenue to the state coffers and contributes 54pc share in the country’s total exports.

Federation of Pakistan Chambers of Commerce and Industry President Irfan Iqbal Shaikh feels one of the most difficult tasks for the Shehbaz government was to bring down or rationalise commodity as well as petroleum prices. The rupee had started gaining strength and hopefully, the dollar will be available for Rs170 in case the political situation remains stable, he hoped.

Mr Shaikh feels if the interest and export refinancing rates are not decreased drastically, exporters would not be able to compete with regional countries even. He explained the current tide of inflation had nothing to do with the SBP policy rate, but with political uncertainty, lack of direction in economic policies and supply-side disruptions.

All-City Tajir Ittehad Association General Secretary Ahmed Shamsi was of the idea that the new political set-up needs at least a month to stabilise the exchange rate, take steps to lower current account deficit and interest rates and introduce taxation reforms to lure more people into the tax net. He added that the focus will also be on pulling Pakistan off the FATF grey list.

Businessmen Group Chairman Zubair Motiwalla advised Prime Minister Shehbaz Sharif to ensure every decision that directly or indirectly affects trade and the industry is devised in consultation with the industrial community. He also brought to attention the issues of Karachi, such as infrastructure, gas, electricity and water crisis.

Optimism in Lahore

The business community in Lahore termed Shehbaz’s appointment a good omen for the industry, hoping he can take the country out of the economic crisis through export-led growth.

“Since Mr Shehbaz Sharif is a good administrator, I will request him to declare an export emergency and enhance foreign exchange reserves considerably,” Ijaz Khokhar, the chief organiser of the Pakistan Ready­made Garments Manufa­cturers and Exporters Association, told Dawn.

He suggested Mr Shehbaz must also immediately order the release of billions of rupees in sales tax refunds to exporters to provide them relief in dealing with the liquidity crunch caused by the delay.

Pakistan Textile Exporters Association Chairman Khurram Mukhtar hoped the new premier would take steps to put the country on the path of sustainable growth. The Lahore Chamber of Commerce and Industry also congratulated Shehbaz, who has served as the chamber’s president in the past, on becoming the PM.

LCCI President Mian Nauman Kabir and other office-bearers in a statement on Monday expressed optimism the country would make remarkable achievements in economy, democracy and foreign relations under the leadership of Mr Sharif. They hoped Pakistan would emerge as a global leader in innovation, security, poverty alleviation and infrastructure development.

Consultations for budget

The Islamabad Chamber of Commerce and Industry (ICCI) suggested the government make economic revival its top priority.

ICCI President Muhammad Shakeel Munir listed the multiple challenges the economy was facing, including local and foreign debt, rising inflation, the falling value of the rupee, declining foreign exchange reserves, growing fiscal imbalances and dwindling foreign direct investments. He suggested the new government engage with the private sector to evolve a comprehensive strategy for the economic revival of the country.

Senior Vice President Jamshaid Akhtar Sheikh and Vice President Muhammad Faheem Khan said as soon as a new finance minister was appointed, he/she should visit the major chambers of commerce to consult the business community before finalising the annual budget.

‘Here to help export’

Former finance minister Miftah Ismail sent out an assurance to the business community, tweeting: “To all my industrialist & exporter friends worried about their wage bill increasing due to PM Shehbaz Sharif’s increasing the minimum wage, remember just in two days your market cap has gone up by 5.4% and PM MSS’s govt is here to help you export, grow and earn more.”

Published in Dawn, April 12th, 2022