Harnessing the SCO Summit: A strategic opportunity for Pakistan’s economic growth

The convening of the Shanghai Cooperation Organization (SCO) summit in Islamabad marks a pivotal moment for Pakistan, presenting a golden opportunity to strengthen economic cooperation among member states. With most SCO countries sharing borders, the potential for increased bilateral trade is immense. By fostering these trade relationships, SCO members can better tackle shared challenges, such as food security, and reduce their reliance on expensive products from Europe and the United States. In light of Pakistan’s ongoing energy crisis, exacerbated by soaring gas and oil prices, enhanced trade relations with SCO nations could prove crucial in stabilizing the economy.

A key player in promoting trade among SCO member countries is the small and medium enterprise (SME) sector. SMEs serve as the backbone of any economy, driving innovation, job creation, and economic diversification. However, to unlock their potential, Pakistan must establish a supportive framework that encourages their growth. This involves providing easy access to affordable loans, offering training opportunities, and implementing special facilities for the import of raw materials and the export of finished products.

The government should consider introducing special energy tariffs tailored to the needs of small businesses. The rising costs of electricity and gas have significantly inflated their production expenses, making it increasingly difficult for these enterprises to remain competitive in the market. By addressing these issues, the government can help SMEs reduce operational costs, thereby enhancing their profitability and viability.

In addition to financial support, the government can take further steps to bolster the SME sector. For instance, offering loans at a four to five percent markup would provide the necessary capital for SMEs to expand their operations. Moreover, activating the Trade Development Authority and commercial attachés stationed in foreign embassies could facilitate market access for Pakistani products, leading to a significant boost in exports in a short timeframe.

To further enhance the productivity of SMEs, the government should support them in acquiring modern technology. This investment will not only boost production efficiency but also help reduce costs, allowing SMEs to compete more effectively in domestic and international markets. Additionally, the government must work towards simplifying and clarifying the complex tax system, which currently hinders business development. A transparent and streamlined tax structure can encourage investment, foster innovation, and ultimately contribute to economic growth.

The importance of political stability cannot be overstated in this context. The current political landscape in Pakistan is fraught with challenges, and the SCO summit presents a unique opportunity to transcend these issues. By leveraging this event, the country can move beyond political instability and accelerate its journey towards economic development. A nation’s industrial progress heavily depends on the establishment and growth of small and medium enterprises. Prioritizing these businesses is essential for fostering an environment conducive to economic advancement.

To lift the country from the quagmire of debt and achieve sustainable economic development, it is crucial for both the government and the opposition to prioritize national interests over temporary political gains. By working together to create a favourable environment for SMEs and enhancing trade relations with SCO member countries, Pakistan can pave the way for a more prosperous and stable future. The SCO summit is not just an event; it is an opportunity for Pakistan to redefine its economic trajectory. By capitalizing on the potential of small and medium enterprises and strengthening trade ties with SCO nations, Pakistan can not only address its current challenges but also lay the groundwork for long-term economic stability and growth.

Ch. Shafique Anjum (President, Faisalabad Chamber of Small Traders & Industries Chairman, Faisalabad Flour Mills Association)