Pakistan Business Council’s Board of Directors meets to discuss major national issues

Islamabad, August 10, 2015 (PPI-OT): In a recent meeting of the Pakistan Business Council’s Board of Directors major national issues regarding the economy and development of Pakistan were discussed. The meeting which was attended by the following leading directors in Pakistan: Mr. Atif Aslam Bajwa, President and CEO Bank Alfalah, Mr. Abdul Razak Dawood Chairman Descon, Mr. Ehsan Malik, CEO Unilever Pakistan and Mr. Kamran Y Mirza, CEO, Pakistan Business Council shared their thoughts on the following key issues.

1. Regarding the recent interest rates in the country, though the PBC would have liked to have seen a decrease in the rates to stimulate investments and demand, the Board was of the opinion that given the current state of the economy the decision of the SBP to hold interest rates at their current levels was appropriate.

2. Though a stable exchange rate is an important indicator of economic stability, the Board was of the opinion that this should not be at the expense of competiveness of domestic manufacturing.

3. It was noted that inflation is at record lows primarily due to a drop in commodity oil prices. The PBC board is of the opinion that this window of opportunity should be used to reduce subsidies especially in the energy sector so that when prices rebound there is no major public backlash.

4. The Board also expressed its concerns vis-a-vis stagnating exports and the excessive dependence on a few markets / commodities. The Board hoped that the Ministry of Commerce will actively involve the PBC in drafting and implementing the next Strategic Trade Policy.

5. In reference to the NTC Act 2015 the Board expressed concern regarding Section 70 of the Antidumping Duties Ordinance 2015. The Board felt that this section will effectively ensure that no action initiated by the NTC on a complaint from a domestic manufacturer will be allowed to proceed to its logical conclusion in a timely manner. PBC decided to actively interact with the legislature / media / MoC to rectify this major flaw in a law designed for providing a level playing field for the domestic industry.

6. The PBC Board called for a review of Pakistan’s FTA policy. It observed that none of the FTA that Pakistan had signed had led to an increase in domestic manufacturing for exports to the FTA partner country. On the contrary not only had the FBR’s revenues gone down due to increased diversion of imports from non-FTA countries, but that the cheaper imports had in some instances irreparably damaged domestic manufacturing and led to an increase in pressure on existing manufacturers by the FBR to make up for lost revenues.

7. The Board supports all moves by the FBR to increase the domestic tax base and document sectors of the economy which are currently out of the tax net.

8. As the PBC serves as the Secretariat in Pakistan for the PIJBF the Board supported trade normalization with India based on the principle of reciprocity. It cautioned the government against granting India NDMA without ensuring a level playing field for the Pakistani businesses both in their domestic markets as well as when exporting to India.

9. Regarding Pakistan’s economic engagement with Afghanistan the PBC Board again cautioned against excessive expectations from the Afghanistan Pakistan Joint Business Council (APJBC). The Board felt that though every effort must be made for closer economic relations between Pakistani and Afghan businesses, this should not be at the expense of the formal sector in Pakistan. It further stated that private sector investment decisions are made rationally and for political expediencies – and this aspect must be kept in mind when evaluating the success of APJBC. The PBC also serves as the secretariat in Pakistan for the APJBC.

10. Lastly, the Board reiterated the PBC’s commitment to trying to forge a National Economic Agenda by continuing its interactions with the major political parties and other stakeholders. It welcomed the national consensus on the war on terror and hoped that the PBC’s attempts started in 2011 for a common National Economic Agenda would lead to an agreement among the major political parties and the other stakeholders to address the major socio-economic challenges facing the country.

The meeting was chaired by Mr. Bashir Ali Mohammad – Chairman Gul Ahmed who speaking on the occasion stated: “While the government is taking prominent steps to uplift the economy of the country, this should not come at the expense of our local businesses. All initiatives should be taken keeping in mind the stability of Pakistan and further enhancing the progress of all sectors involved.”

For more information, contact:
Samir S. Amir
Director Research
Pakistan Business Council
M-02, Mezannine Floor
Beaumont Plaza
10, Beaumont Road
Karachi -Pakistan
Tel PABX: +92 213 563 0528 and 29
Tel Direct: +92 213 563 0588
Fax: +92 213 563 0530
Cell: +92 300 8233 714
Website: www.pbc.org.pk