KARACHI: The export-oriented businesses of Pakistan are unlikely to sustain the burden of additional billions of rupees amid the withdrawal of subsidised electricity, restricted imports, all-time high-interest rates, and the rupee’s devaluation against the US dollar.
President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Irfan Iqbal Sheikh said the private sector in Pakistan is under enormous distress and its investments have dried up consistently.
He said businessmen’s confidence in the government policies and its handling of the IMF programme has come to a standstill, adding that the businessmen have never witnessed such inconveniences in doing business in the history of Pakistan.
He asked the government what steps would be taken after the resumption of the IMF programme to stabilise the economy and how and when the government would take the business community into confidence on these steps.
Mr Iqbal said increasing the revenue collection target from Rs7,004bn to Rs8,709bn on the directives of IMF would further tax the already taxed people instead of simplifying the taxation system, which would then affect businessmen’s profitability and decrease the employment opportunities.
Meanwhile, Businessmen Group (BMG) chairman Zubair Motiwala and SITE Association of Industry president Riaz Uddin on Monday condemned the government for withdrawing the subsidised electricity tariff of Rs19.99 from March 1 for the export-oriented sectors on the directives of IMF.
“Unfortunately, this abrupt tariff hike is also backed by National Electric Power Regulatory Authority. The Regionally Competitive Energy Tariff (RCET) has almost doubled depending on the export sector,” they said while jointly addressing a very large gathering of affected SMEs situated in the SITE area.
Nepra on March 10 endorsed the decision of the federal government to withdraw subsidised rate of electricity for the export-oriented industry, rendering Pakistan’s exports uncompetitive on the world markets.
They said that this act of the government is detrimental to exporters as most of the affected SMEs are indirect exporters and are closely weaved into the entire supply chain of exporting industries.
Mr Motiwala further said that in such difficult times when the nation is in dire need of fetching foreign exchange, this anti-competition move would further plague the local exporting industries, resulting in a further drop of exports which stood at $32bn in 2021-22 and are expected to go down to $27bn-28bn during FY23.
The gathering of more than 150 factory owners, employing more than 100,000 workers unanimously demanded the resumption of RCET in line with the earlier decision of the Economic Coordination Committee (ECC) back in October 2022.
Mr Riaz Uddin said the future course of action would be decided after Eidul Fitr.
The government is not realising the gravity of the situation regarding raw material shortage due to import restrictions, which has already rendered the closure of many industries, he added.
The SITE chief said the confidence of foreign buyers has shaken as they’re looking towards other countries amid Pakistani suppliers’ inability to ensure timely shipments.
Published in Dawn, April 11th, 2023
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