Exporters call for reforms to spur growth

Suggest foreign investments, energy cost reduction, and bureaucratic overhaul to transform economic landscape

KARACHI:

Exporters have urged the government to attract foreign investments in export sectors, reduce energy costs, and eliminate unprofessional bureaucratic attitudes to aid the beleaguered economy’s growth.

They advocate for the promotion of export-oriented industries, creating a level playing field, and implementing substantial cuts in energy prices—aiming for equivalence with rates in South Asian countries like Bangladesh, Sri Lanka, and others. Export-oriented industries, such as the textile and garment sector, not only generate mass employment but also make a significant contribution to the national economy.

Leading exporter Abdul Rehman Fudda, also a former chairman of the Pakistan Hosiery Manufacturers Association (PHMA) South Zone, spoke to The Express Tribune to convey the urgency, “We have to manage our businesses as there is the lowest viability in the history of the country.” Fudda emphasised scrutinising day-to-day business costs, highlighting the challenges faced by small businesses and industries in particular. Large industries and businesses may take time to succumb to these challenges, and he noted the trend of business leaders shifting capital due to a bleak outlook, with property prices rising in the Middle East. He added that working capital, turnout, and business volume are rapidly shrinking due to crippling inflation in the country.

Naveed Ahmed, All Pakistan Textile Mills Association (APTMA) Central Vice Chairman, underscored the imminent threat posed by skyrocketing energy (both gas and electricity) costs and high bank interest rates to industries throughout the country. He attributed this threat to government inefficiencies and stressed the need for the government to control both energy tariffs and interest rates to support local industries. Ahmed cautioned against foreign investors taking advantage of local infrastructure projects to overcharge consumers. He stressed that foreign investments should benefit locals rather than overcharge local consumers and take profits abroad, as recently observed.

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He stated that competitive industries do not attract foreign investments. Instead of merely supporting industries, Ahmed argued that the government should create an internationally competitive environment, including industrial estates, world-class infrastructure, better utilities, and banking facilities. Until industries become competitive, they will not thrive and will continue to demand back-to-back packages and protections.

Regarding specific sectors, Ahmed emphasised the need to incentivise garment industries due to their large employment numbers. He also highlighted the potential of agro-based industries to meet local consumption needs, questioning the discrepancy where an agricultural country like Pakistan imports commodities like wheat.

Another exporter, Babar Khan, pointed out that the era is witnessing the highest utility prices, making business economically unviable for many export industries. He highlighted the lack of competitiveness with regional counterparts due to significantly lower utility costs in other countries. Khan stressed that the high costs of exportable goods could divert international buyers to competitors offering cheaper products.

Khan identified a long-term, lethargic, and unprofessional bureaucratic attitude as a significant obstacle to foreign direct investment (FDI). He called for a streamlined, real one-window solution for all FDI requirements and warned that high utility costs could act as a deterrent to potential foreign investors.

Published in The Express Tribune, December 13^th, 2023.

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