LAHORE, Jan 21: Macroeconomic reforms and policy changes in consultation with stakeholders can lead to a sustainable economic recovery according to the Lahore Chamber of Commerce and Industry (LCCI).
Re-organisation of the power sector, restructuring of public sector businesses and reduction in trade deficit would help overcome economic woes, proposed LCCI President Farooq Iftikhar, Senior Vice-President Irfan Iqbal Sheikh and Vice-President Mian Abuzar Shad in a joint statement on Monday in the wake of the IMF decision that it would not write-off or reschedule Pakistan’s loan.
They also stressed the need for a mechanism to ensure in letter and spirit implementation of economic policy decisions in the larger interests of stakeholders.
“Since gas and electricity shortage is mother of all economic ills, a focused attention to stop pilferage and allocate more revenues to overcome circular debt issue is needed.
The power sector infrastructure should be upgraded as without doing so there will be little improvement even if major new generation facilities are built. The government-owned power generation companies should be technologically refurbished to bridge the demand-supply gap by 1,500MW,” they said.
On restructuring of public sector businesses, the LCCI office-bearers said that public sector entities, including Pakistan Railways and PIA, were incurring a loss of over Rs600 billion annually, the same should be privatised.
They suggested that the government should announce incentives for the private sector to give boost to exports and control the fast widening trade deficit.“Pakistan’s exports are confined to a few destinations while a major chunk comprises textiles only. Measures are direly needed to enhance export base by including more items and new export destinations.
“In 1960s the collective exports of a number of Far Eastern countries were much smaller than Pakistan but today each country has bigger export than Pakistan and they have achieved this milestone by giving proper consideration to proposals of their respective business community.
“At a time when the global trade is poised for faster than expected upward growth and climbing out of this painful economic recession by putting people back to work, the situation in Pakistan is heading to point of no return,” said the LCCI office-bearers while inviting the attention of the government towards the political uncertainty and deteriorating law and order situation in parts of the country.
“The LCCI understands that law and order is a major cause of decline in local and foreign investment and if the government fails to respond to private sector wake-up call, the economy will continue to suffer with ultimate result of bank defaults and massive lay-offs.
“Deteriorating law and order situation in Karachi is a matter of grave concern for the entire business community as the Sindh capital is the business hub of the country that generates huge revenue with sizeable share in the GDP.
If the law and order situation is under control and electricity is made available to the industry round-the-clock, not only local investors would get an encouragement but foreigners would also be ready to initiate joint ventures with their Pakistani counterparts thus creating more jobs.
“Provision of security to citizens is government’s responsibility, but unfortunately it has miserably failed to fulfil its responsibility. It has sent a wrong signal to foreign investors and also caused brain drain and the industry drain as a large number of industrial units have shifted their operations to other countries,” said LCCI office-bearers and added that the government would have to listen to the business community’s point of view for bringing peace back to this land of opportunities.
“The countries that were far behind us a few decades ago are now progressing by leaps and bound while the economic situation in Pakistan is not satisfactory and this is only because of adverse law and order situation,” they said.