Foreign investors are calling for a reduction in the cost of doing business in Pakistan, while Pakistani investors urge the government for a reduction in the cost of industrial production.

Both the demands are valid to a considerable extent, while the government argues both the costs have been coming down, but not fast enough for the needs of the country for stepped-up job creation and accelerated economic growth.

Both the reductions in the cost are essential now to the maximum possible extent, and fast enough, if Pakistan's exports are to become competitive in the global market and have access to new markets after the textile quota system expires on December 31 this year.

The challenge which Pakistan faces is not only retaining the existing volume of exports with textiles occupying 66 per cent of them but also increasing that volume in the free-for-all in exports that would follow the expiry of the quota system.

To achieve such larger exports and sustain them, Pakistan may have to reduce the prices of its export products, improve the quality and brighten the package and adopt more efficient and cleaner business practices unlike the mixed performance the exporters are giving now, except for some positive performers with an excellent track record.

All the textile exporting countries are hoping for larger exports after the expiry of the quota system, particularly the textile giant China, followed by India and the East Asian countries. They are reported to have invested a great deal in the renovation and expansion of their textile industry, with China far ahead of others.

We are said to have invested first one billion dollars more and then two billion dollars more and now the claim is a total of four billion dollars which appears an exaggeration, though repeated by the government too.

Now the minister for industries and production, Mr Liaquat Jatoi, has come up with a call for reduction of the cost of doing business to make our exports more competitive. As a first significant step, the government is permitting power production by the industrialists for their own use which will make the power used by them cheap, he says.

He also says to make the investment easy and management of industries smooth one-window facility will come into operation soon after the summary already prepared for the Economic Coordination Committee (ECC) of the cabinet is approved by it at its next meeting.

There has been a lot of talk of one-window operation for long now. Successive governments have spoken of that, but without that becoming a reality. So now the EEC should make that a reality quick.

These are the first steps in this direction and they should be followed by many others which are imperative to prepare our industry for the future and enable it face varied challenges.

He wants the small and medium enterprise units whose chiefs he addressed at Lahore play a far larger role in this area. He urges the cost of credit to them to be made low, and easily available, in place of the prevailing high rates. And that is the demand of all SMEs in the country to enable them play the kind of effective role expected of them, particularly in increasing employment avenues.

To make the cost of production low several pre-requisites are essential:

(1) Cheap power must be made available on a dependable basis as every industrialist cannot afford to produce his own power. There should be little of break-down in supply because of load-shedding or collapse of the old system.

(2) Adequate investment loans should be made available along with the bridge-finance and at reasonably low rates.

(3) Law and order should be ensured and culprits should be apprehended quick.

(4) Other inputs like water should be ensured instead of the industrialists depending on undependable tanker water.

(5) Wages should be reasonable and labour discipline should be strictly enforced.

(6) There should not be too many holidays and strikes holding up production and export movements.

(7) The port operations should be efficient and devoid of go slow operations and not be too expensive.

(8) All these facilities should be available in an environment of moderate taxation, without too many nagging taxes, which are exasperating to pay even when the overall amount is not too high.

(9) The industrialists should also opt for low profits instead of the high profits they are used to now and benefit more by the volume of sales than by high profit per unit of production through any kind of cartel arrangement.

(10) There should be far less corruption than what obtains today when the top persons in authority content themselves saying there is no corruption at the top. The industrialists and their staff-men have to deal with the officials in the field and they have to be rid of the diverse corruption which vitiates industrial production.

The cost of doing business less expensively requires most of these facilities, including cheap power, loans with low rates of interest and moderate taxation.

They need better communication facilities and an adequate transportation system that is not too expensive.

The officials in the field have to be more helpful and there ought to be less of corruption. Refund of taxes to the exporters should be smooth and quick instead of the good men-being punished for the sake of penalising the corrupt businessmen.

Productivity in Pakistan is low both in the industrial and commercial sectors. That ought to be increased steadily in the manner that is happening in the US now, followed by Japan.

Pakistan should make use of the expertise of the Asian Productivity Organization in this area and improve its productivity all round. The help of the UNDP should also be sought, for a larger purpose in this area.

One of the reasons for our industrial setbacks is the high cost of steel produced by the Pakistan Steel. Mr Liaquat Jatoi now says sales of Pakistan Steel in 2003 was Rs25 billion with a profit of Rs2 billion . The Pakistan Steel should try to make its products available to the industries cheap and the same goes for its steel products so that the industries can have cheaper raw materials.

In a period of high unemployment the governor of the Punjab, Khalid Maqbool, says the textile made-up industrial units can accommodate three million more workers. He has not explained how. The fact is that due to high prices of cotton a larger number of power loom units are shut and so are several ancillary units, throwing many workers out of employment.

The government is to set up two or three textile cities, including one at Sundar near Lahore. That modern facility is to accommodate a large number of persons as well as the latest technology. Such facilities are expected to enable the country face the challenge of heightened global competition in textiles after the quota system expires by the end of the year.

If this facility is a success there can be other 'cities' specialising in other industries which too, will face heightened global competition. Let us make a quick beginning in this regard instead of keeping the industrialists and the country waiting for too long.

The challenge is now to the government, to the industry, to the workers and the cotton growers and ginners who have to try hard to make a success of such new enterprises and daring ventures.