On 24th April, Pakistan Prime Minister Shehbaz Sharif met with the business community and expressed how the economic collapse has dragged their nation far behind Bangladesh. Subtly alluding to the thriving economy of Bangladesh, he stated that “East Pakistan” which was “once considered” a burden on the nation has achieved enormous progress in industrial expansion.
The prime minister bemoaned, “I was quite young when we were told that it’s a burden on our shoulders. Today you all know where that ‘burden’ has reached (in terms of economic growth) and we feel ashamed when we look towards them.”
As reported by Dawn, the business community in Pakistan thinks that doing business under the current conditions was “almost impossible”, especially given the high cost of energy and the unpredictable policies of the government. Arif Habib, the chief of Arif Habib Group, mentioned, “You have made a few handshakes after taking the charge that has produced good results and progress on the IMF deal is one of them.”
He added, “I suggest you do a few more handshakes. One of them is regarding trade with India, which would greatly benefit our economy. Secondly, you should also (patch up) with a resident of Adiala Jail (a reference to jailed PTI leader Imran Khan). Try to fix things at that level as well and I believe that you can do it.” The prime minister declined to explicitly address the worries about political stability, but claimed he had taken note of the recommendations for economic expansion and had promised to bring businesses to Islamabad soon so they could sit down with him “until all the issues are resolved.”
“The prime minister is keen to support the industry by doubling exports and reducing business costs but it seems impossible in the current situation,” complained Zubair Motiwala, a prominent industrialist and chief of the Trade Development Authority of Pakistan (TDAP), who heads the Karachi businessmen’s body called Businessmen Group (BMG) during his presentation.
He added, “Due to the increasing cost of doing business with these gas and electricity prices, our competitors would soon take us over and get Pakistan’s export orders. It is surprising that we want to increase exports and local manufacturing, but we are increasing energy prices by including cross-subsidies, which has resulted in a gas tariff of Rs 2,600 per unit for industrial heating and Rs 3,100 per unit for captive power.”
The businessman questioned “if any business can survive with such an increase in the current international market situation,” making reference to the gas rates from six months ago when they were priced at Rs. 1,150 and Rs. 1,350 per unit, respectively. “The industry is willing to pay 100% of the gas price without any subsidy. We don’t want any subsidy. We just want the industry to get a fair gas price.”
He argued that Pakistan was burdened with capacity charges as a result of the “unnecessary capacity” of power plants, which prevented surplus electricity from being either sold or given to companies at a reduced rate. “This unnecessary capacity is also increasing the circular debt issue in the power sector. Therefore, it is necessary to introduce a scheme to reduce the flat tariff for industrial consumers, which will increase electricity consumption and also help reduce the circular debt issue.”
