Business bodies seek support for ailing export sector

Demand cut in utility tariffs, payment of tax rebate

ISLAMABAD: The business community urged the government on Tuesday to reduce power tariff for exporting companies in order to boost their competitiveness and growth.

Speaking at a seminar on export competitiveness, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zubair Tufail said supporting and incentivising export sectors was a norm in most regional economies.

“Prices of gas and electricity are about 50% lower in the rest of the region, along with lower costs of labour and other inputs,” Tufail said, stressing that these factors had led to higher exports from regional countries.



He said these measures would help in reviving the dwindling export sector and absorbing the growing labour force through industrial growth in the country.

Former State Bank of Pakistan governor Dr Ishrat Husain said exports played a major role in ensuring long-term economic stability and urged the government to facilitate the sector.

He cited high cost, unavailability of energy, lack of skilled manpower and disinterest on the part of local industrialists in imparting skills to existing employees as major reasons behind the declining exports.

“All of this contributes to increasing the cost of doing business for domestic manufacturers, which reduces competitiveness and erodes the share of Pakistani products in global markets,” he added.

Demands for reducing prices of utilities and incentivising exports have been gaining steam since the current PML-N government came to power on the back of a pro-business campaign and outlook.

Endorsement from others

Separately, Pakistan Hosiery Manufacturers and Exporters Association (PHMA) reiterated the demand for reduced utility tariffs for the exporting industries in order to increase their competitiveness versus regional rivals.

Over the last decade, Pakistan has lost its global market share in textiles - the country’s main exports - to regional competitors India, Bangladesh and Sri Lanka. This phenomenon has infuriated domestic textile businesses, which have been stifled due to constant energy shortages. “The cost of doing business in Bangladesh, India, Sri Lanka and China is extremely low compared to the cost in Pakistan,” PHMA Southern Zone Chairman Muhammad Riaz Ahmed said.



He pointed out that the rate of water for industrial consumption was the highest in Karachi compared to the rest of the country, apart from endemic water shortages that Karachi-based businesses had to face, which prevented full-capacity production.

“Unless the cost of inputs is cut significantly and a smooth supply of utilities and availability of better infrastructure are ensured, exports will fail to increase,” he warned.

The PHMA leader also called for the release of outstanding tax rebate and refunds announced under two five-year textile policies.

“Only 10% of these refund claims have been paid to date,” he claimed, while stressing that remaining rebate claims should be paid immediately through the State Bank of Pakistan.

He regretted that textile units were being shifted to other countries because of the high cost of doing business and lack of required facilities and enabling infrastructure.

Published in The Express Tribune, August 23^rd, 2017.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.