Economic uncertainty, political instability and international
economic situation rapidly jeopardise our fragile economic
structure, an international business owner informs the TFD
Muhammad Umar Waqqas
KARACHI: Pakistan’s economy is estimated to have contracted in FY23, after two consecutive years of stellar growth. The stats and projections with respect to Pakistan and its fate as an economic powerhouse have always been draped in so many layers of ifs and buts that the business community isn’t able to get the true potential out from what they have invested. It either comes down to luck or fate.
Being a population of 250 million, having a strategic geological position in the region can do wonders and it will do wonders Insha’Allah. Pakistan currently faces a complex situation. The fury of mother in the form floods and the mass destruction while difficulties securing critical inputs, including fertilizers, further slowed agriculture output growth. With around 45% of poor workers relying on agriculture, weak agricultural performance had significant poverty impacts. Supply chain disruptions due to import restrictions and flood impacts, high fuel and borrowing costs, political uncertainty, and weak demand affected industry and service sector activity, and dampened private investment.
Private consumption also shrank with weakened labour markets and surging inflation. This likely reduced the labour incomes of millions of workers, especially those who moved to lower-productivity informal jobs. Political uncertainty, global economic & geo-political situation aggravated the current economic woes of our very fragile economy, which is not capable of bearing any shocks.” Managing director of Allied Impex Corporation (Pvt) Ltd an ISO Certified company serving industry since 1975 tells TFD.
Shameem says, “In my opinion there is a dire need to develop consensus over economy among all stakeholders to avoid sovereign default, marching towards sustainable economic growth, and to avoid this repeating situation that comes after every few years. If you look at things from the perspective of an average business owner. He/she has lost hopes from state institutions like law enforcement, judicial system, democratic system.
Facing high utilities charges as line losses due to line theft. The person paying bills regularly is charged more for the ones who are not paying their dues making life more difficult for being a law abiding citizen. When he travels to develop business opportunities, a cartel of airlines and other commuting platforms hyper charges as there is no check and balance. After enduring all this effort surviving then seeing the returns is not encouraging, where the person observes the NGO based federal business capitalising market with favoured taxation and priority consideration on all platforms.
A thriving business not only benefits one organization, it creates a domino effect for the benefit of the whole population like job creation, better compensation, better health care affordability, education for children creating a less stressed work force resulting in better productivity. The major focus should be on the economy. We need a long term strategic plan to revive the country’s economic structure.
Uncertainty is a factor that is present in any country that is natural, yet the level of uncertainty Pakistan’s business community is facing is abnormal. Excessive taxation, inconsistent policies, turmoil over political landscape is unfavourable to attract new business or grow business. On the other side, consumers who drive the economy are limited to the fulfilment of basic necessities like energy, food and healthcare. Burdened by direct and indirect taxation the purchasing power is diminishing.
Need of the hour is to have a stable mechanism headed by the Prime minister and comprising federal and provincial finance ministers, representatives of major political parties of elected parliament, military leadership, senior economists and business community.”
“A more robust recovery will require an ambitious medium-term reform agenda focused on fiscal consolidation and enhancing competitiveness, supported by strong political ownership and commitment. The reforms should include measures to increase revenues by encouraging private business to bring in technology transfers with time bounded completion and rewarding with tax benefits, saving from the governmental expenditures, broadening the tax base indirection of the tax evading population, including from closing exemptions of state servants and tapping increased revenue from property. It would also entail measures to rationalise fiscal expenditures, such as by reducing wasteful and regressive subsidy spending, and to restore private sector confidence through business regulatory reform and reforms to state-owned enterprises, and to address inefficiencies and high costs in the energy sector.
Make joint efforts by all provinces and federal units to conserve energy and utilization of daylight in working hours especially in markets and focus on power generation to reduce dependency on fossil fuel to reduce enormous USD 27 billion bill of energy. National consensus is needed on immediate privatisation of state owned units specially loss-making state-owned enterprises.” Senior member of the business community Shameem Ebrahim tells the TFD.