The TDAP is to be an autonomous body as its new name ‘authority’ rather than ‘bureau’ suggests. It will now function under the commerce minister as chairman and not under the commerce ministry and it will have a chief executive in place of the chairman of the bureau who will have ministerial status.
Along with that, the trade and commerce group of 32 officers is being disbanded making its former officials unhappy.
The TDAP will now be more like Britain’s board of trade or the powerful US trade representatives office. Along with that a good many changes are to come in the trade bodies of Pakistan. And the domestic commerce is to receive critical new attention and undergo some essential reforms and serious restructuring. How long all this will take is not obvious as the trade bodies, big and small, tend to go the way they like.
The apex body of the chairman of commerce, Sidat Hyder and trade associations, the Federation of Chamber of Commerce and Industry is to undergo major changes under its own initiative. The federation had authorized the firm of Murshid Associates to look in to how the apex body has been functioning and suggest adequate reforms to make it an effective body to meet the demands of the new WTO world.
The consultants’ report which has been submitted, says that the FPCCI with its 47 regional chambers and 128 sectoral trade associations has become an unwieldy body. And its managing committee of 102 members is too big to manage anything effectively including its budget administration and activities. It has suggested that an executive board or an executive committee of 10 members be set up inclusive of three members from outside who can be economists or managerial experts or can belong to other relevant professions.
The FPCCI has set up a committee under its new president Chaudhary Mohammed Saeed to examine the report. He is said to be keen on major reforms in the FPCCI to make it an effective body.
Some of its members want a 15 member executive committee with three to five members from outside who are experts in various relevant fields. It wants a secretary general to become the chief executive or managing director and the staff to be qualified for the task handed over to it.
The consultants have also said that the members of the FPCCI want to take advantage of their membership as the apex body and at the same time make small or no contribution to it.
The FPCCI has far too many committees to promote trade with various countries of the world, but most of them have made a small contribution or none to promote bilateral trade with other countries. The membership is used by many members for printing their letterheads and visiting cards.
As small businessmen became president of the FPCCI because of their political clout, some of the industrialists who felt left out suggested the formation of a confederation of industries. Such a body focusing on industrial problems along with an exporters chamber and the All Pakistan Textile Mills Association can make a major contribution to the economy, but that move has been repeatedly opposed by the FPCCI office holders as if the industrialists leave the their organization it will shrink to become a mere traders body. The FPCCI had once an economic advisor but none for a long time now, nor is it conducting any research in respect of trade or industry. It relies largely on the official figures, however misleading them may be.
The FPCCI and the various chambers have relied more often giving receptions, dinners and lunches to various officials to plead their case and the FPCCI also derives great pleasure in giving scores of export trophies to the exporters, in many cases year after year to the same exporter.
The government is now interested in undertaking a proper study of the domestic trade and come up with an annual publication like the Economic Survey of Pakistan with full details of all that has happened in a year in the external and domestic trade.
Some journalists in Islamabad who tried to obtain information from the ministry of Commerce about the details in domestic trade found the ministry had too little of that or none at all. The officials referred them to the CBR. The CBR referred them to the sales tax division and the sales tax division had only the figures of the registered sales tax payers. There is a large information vacuum in the domestic trade sector which the new annual trade survey will fill.
Reforming the domestic trade has become very important so as to reduce the cost of distribution and retail sale and cut the price of the exports and improve the quality of the export. Prime Minister Shaukat Aziz says the government is making efforts to improve and professionalize distribution and supply chain in Pakistan which will benefit the consumers and open more opportunities for exports.
He says: “We in Pakistan have an efficient supply chain and we really want to professionalize the distribution and the supply systems here”. He was welcoming a cash n carry chain from Germany, which is to open next year 10 outlets in major cities of Pakistan within an initial investment of 150 million euros. The metro group has more than 500 stores in 28 countries and had a sales volume of 26 billion euros in 2004.
The German-based company’s chief promises an efficient supply system, which will help reduce the cost of distribution and benefit the consumers through lower prices and quality products. He said the group would buy the products of the farmers from the farmers, which will make the eventual sale price low.
With sugar prices touching Rs36 per kilo and frantic efforts being made for quick imports from India with the world price of sugar very high the structure of the domestic trade needs looking in to carefully and be reformed thoroughly.
Earlier when the term of the president of the FPCCI was one year it was said it was too short a period and so the incumbents were trying to prolong their term arbitrarily, so Mr. Ghulam Ishaq Khan as Commerce minister in the 1980‘s extended the term to two years. And he came with a roster for the various provinces to have their own representative as president of FPCCI turn by turn. In effect it was found that most of the businessmen come from Punjab. Tariq Saeed, S.M Muneer and Riaz Tata from Karachi, Saifullah Paracha from Balochistan, Raja Abdul Rehman from Azad Kashmir etc. When small businessmen with some political clout became president of the FPCCI one after another, they lost their clout vis-a-vis the government.
In the area of domestic trade one area after another is going in to the hands of foreigners. The soft drink trade went into the hands of the American’s followed by fast food chains. Businessmen who are protesting against liberal imports on low import duties now find some of the most lucrative parts of the domestic trade going in to the hands of the foreigners.
Such competition will increase after our free trade agreement with China comes in to force and cheaper Chinese goods follow and there after we sign the free trade agreement with America along with a number of other countries including Malaysia and Thailand. So the Pakistani industrialists and businessmen have to do everything possible to lower their cost of production and sale and reduce the margin of their very high profits. They have to follow the pattern set by the Wal-Mart of US, which has become the top company of that country because of its focus on the consumer and on rock-bottom prices. The customer needs a far better deal than he has been getting in Pakistan. And it appears that if the Pakistani traders will not provide that, foreigners will.