As the president of the premier commerce and industry chamber of the country, I have every reason to appreciate the Special Investment Facilitation Council brief by the top authority leading its affairs.
As the president of the premier commerce and industry chamber of the country, I have every reason to appreciate the Special Investment Facilitation Council brief by the top authority leading its affairs.
There is no doubt that the Special Investment Facilitation Council (SIFC) is playing a vital role in stabilising Pakistan's economy and promoting investment. Under the leadership of National Coordinator Lt-General Sarfraz Ahmed, the SIFC has made significant strides in industry, commerce, investment and economic recovery.
The immediate results of their initiatives are already evident. The continuous engagement of the SIFC leadership with the Lahore Chamber of Commerce & Industry (LCCI) is a clear indication that the council is working in consultation with all stakeholders. This should serve as a model for policymakers and institutions that often overlook business community consultations.
I have been informed that three of the SIFC’s most important projects in Banking, Minerals, Railways and Infrastructure (Special Economic Zones) have been agreed between Pakistan and the UAE. This is just the start, and I am optimistic that more good news is on its way.
It is also important to acknowledge the contributions of Chief of Army Staff General Asim Munir, who has demonstrated through practical measures that his priorities extend beyond national security to economic stability. His efforts successfully curbed the rising dollar rate, bringing it down from Rs343 to Rs278 -- a 21 per cent decrease, which is a significant achievement. These measures have played a crucial role in stabilising the economy and restoring public confidence.
The LCCI is fully committed to serving as a think tank for industry, commerce and economic development. We continuously provide recommendations to relevant forums. As a result of our persistent advocacy, there has been a notable reduction in the markup rate, with expectations of it soon reaching single digits. We also effectively raised concerns about Independent Power Producers (IPPs), leading to the cancellation of several contracts, which paved the way for a reduction in electricity costs. However, we express our concern over the lack of involvement of business representatives in the policymaking process.
To ensure sustainable economic growth, it is imperative to eradicate the black economy. The government must abandon artificial economic boosters such as excessive printing of currency notes. As of June 2024, the total volume of currency in circulation in Pakistan stood at Rs9,153 billion. Excessive printing of money has exacerbated inflation and other economic challenges. If the government ceases artificial economic measures and implements a policy to eliminate high-denomination currency notes, it could help curb the black economy worth Rs30 trillion.
A major challenge that needs urgent attention is the under-invoicing of imports from China, which is causing an estimated loss of $6 billion annually. This issue requires strict regulatory actions to ensure the optimal utilisation of national resources.
The recent agreements with the UAE are a positive development. However, Pakistan must also secure beneficial trade agreements with Qatar and other countries to strengthen its economy. While negotiating trade agreements, it is essential to ensure that they provide mutual benefits rather than unilateral advantages to other nations.
State-owned enterprises such as the Pakistan Steel Mills, Pakistan Railways and others have suffered due to bureaucratic inefficiencies. Structural reforms are necessary to revive these institutions and enable them to contribute effectively to the economy.
The establishment of industrial zones equipped with modern facilities can foster industrial growth and generate employment opportunities, further strengthening the economy. The government must ensure that these zones offer tax incentives, reduced regulatory hurdles and efficient logistics to attract both local and foreign investors
Despite the recent expansion of the federal cabinet, it is disappointing to note the absence of business community representatives. Traders play a crucial role in the economy and their representation in the cabinet is necessary to ensure that economic policies are well-informed and effective.
Reforming the tax system is another essential step towards economic stability. By reducing unnecessary taxes and broadening the tax net, the government can significantly enhance its revenue without overburdening existing taxpayers. Streamlining tax procedures and ensuring transparency in tax collection will also encourage more businesses to register and contribute to the formal economy.
The promotion of e-commerce will not only benefit small traders but also boost the national economy. However, this requires substantial improvements in internet infrastructure and digital facilities. Government initiatives to support startups and fintech companies can further drive the growth of the digital economy.
Modernising the agricultural sector through advanced technology can significantly enhance productivity. The introduction of precision farming, better irrigation techniques and improved storage facilities will not only increase farmers’ incomes but also improve exports, contributing to overall economic growth. In addition, the government must facilitate access to low-cost agricultural credit and establish value-added processing units to boost the agro-based industry.
Energy sector reforms are critical for national progress. By reducing energy wastage and adopting alternative energy sources, the country can achieve substantial economic benefits. Encouraging investment in renewable energy projects such as solar and wind power will reduce dependence on costly fossil fuels and help overcome the energy crisis. Privatising inefficient distribution companies (DISCOs) and reducing line losses can also significantly lower electricity costs for industries and consumers.
Focusing on education and skill development will create employment opportunities for young people. The establishment of vocational training centres and industry-academia collaborations can equip the workforce with modern skills, making them more competitive in the global market. Encouraging foreign universities and technical institutions to set up campuses in Pakistan can further elevate the country’s education standards.
Pakistan possesses immense potential in the tourism industry. To capitalise on this, the government must improve infrastructure and promote Pakistan’s tourist destinations on international platforms. Developing eco-tourism, heritage tourism and religious tourism can attract a large number of international visitors, generating foreign exchange and employment opportunities.
The establishment of industrial zones equipped with modern facilities can foster industrial growth and generate employment opportunities, further strengthening the economy. The government must ensure that these zones offer tax incentives, reduced regulatory hurdles and efficient logistics to attract both local and foreign investors.
To stabilise Pakistan’s economy, comprehensive and long-term measures are necessary. While the initiatives of the SIFC and military leadership are commendable, issues such as black marketing, excessive currency printing and state-owned enterprise inefficiencies require urgent attention. Addressing these challenges will unlock Pakistan’s true economic potential. By implementing these recommendations, we can significantly enhance the country’s economic trajectory and achieve sustainable growth.
The writer is the president of the Lahore Chamber of Commerce & Industry.
