Businessmen advocate special package for SMEs

Say small units grappling with lack of funds, thin demand

LAHORE:

Businessmen have called on the government to announce special incentives for small and medium enterprises (SMEs) to save the economy from slowdown as the small industry represents more than 90% of around 3.2 million enterprises in the country.

All Pakistan Business Forum (APBF) President Syed Maaz Mahmood, in a statement, said that economic crisis had forced global investors to put on hold their investment plans, as reflected in the foreign direct investment (FDI), which was 12% lower than last year.

He regretted that there was no visible improvement in employment opportunities while the SMEs, which were the main providers of jobs, were struggling because of the lack of funds and consumer demand. In that situation, auto vendors, where provided a bulk of auto-related jobs, were operating with the minimum possible staff.

SMEs contribute 40% to the country's gross domestic product (GDP), employ more than 80% of the non-agricultural workforce and generate 25% in export earnings.

Mahmood noted that FDI inflows declined almost 12% to $1.13 billion in the first two months (July-August) of the current fiscal year, as reported by the State Bank of Pakistan.

He said that the slowdown in economy had badly impacted business confidence and it was necessary for the authorities to first create an enabling environment for the local businessmen desiring to make fresh investment.

"Pakistan has remained a potential market for foreign investors, who still have plans to make investment in the country, but they have continued to wait for the return of economic stability. Uncertainty about the rupee-dollar parity is one of their major concerns."

Echoing similar views, APBF Chairman Ibrahim Qureshi emphasised that the government must devise strategies for the promotion of Pakistani products and asked the trade officers posted abroad to highlight the advantages and opportunities provided by the China-Pakistan Economic Corridor (CPEC).

He pointed out that previously foreign investors mainly poured money into sectors which did not pose a risk to their profit margins, particularly the power sector, due to rupee depreciation. "We hope that Pakistan's economy will gain momentum again, which should encourage the investors to inject capital into new projects."