KARACHI:
In Pakistan, even running a business has become much too expensive, which is why job growth and exports are stagnant. Electricity costs around 12 cents per unit, and gas and fuel prices keep jumping. So, by the time a factory, cold storage or even a small shop pays the bill, the profit is already gone before they sell anything. Banks are charging 10.5% interest, so nobody wants to take a loan to expand, which means no hiring and eventually, unemployment. The tax system makes it worse. The tax net is very narrow, but the people who are already registered get crushed with high taxes, audits and endless paperwork. Because of that, small businesses either stay undocumented or just shut down.
Moreover, buyers turn to options abroad because they provide cheaper energy and loans, so a shirt made abroad costs less than one made in Pakistan. On top of this, nothing is stable. Prices, rules and taxes change every few months, so no investor wants to put long-term money here. Resultantly, businesses close or move abroad.
We have made Pakistan so expensive to build in that business itself is leaving. If the government wants jobs and cheaper goods, it must first make it cheap to do business. Cut energy costs, bring interest rates down, simplify taxes and give stable policies. No point in IMF programmes if the cost of running a business is too high.
Pari Karim
Kech
