Tuesday August 16, 2022

PBC spots chinks in EAC armour

By Our Correspondent
May 01, 2022

KARACHI: Pakistan Business Council (PBC) on Saturday said a number of relevant sectors of economy and ministries were denied representation on the Economic Advisory Council (EAC), which might scupper the purpose of its urgent establishment.

“While reviewing the Terms of Reference (TOR) of the EAC The PBC noticed that development of a common Charter of Economy is missing and it believed that fundamental reforms cannot be implemented without cross-party consensus on the economy,” wrote Ehsan A Malik, Chief Executive PBC, in a letter to Prime Minister Shahbaz Sharif.

Malik said without a sound economy, public welfare objectives could not be achieved.

“As the leader of a multi-party coalition, you are in a unique position to at least bring the coalition on a common platform.”

PBC has developed a framework for the Charter and another critical aspect of the economy which is not explicitly covered in the TOR is agronomy, according to the letter.

“Agriculture output is critical for food security and it also has a significant impact on the current account and inflation,” the letter stated.

PBC recommended that rural welfare be represented in the EAC.

The EAC has leading business leaders from the private sector who have valuable insight on the economy.

However, PBC noted there was no representation of the IT/IT-enabled services, startups and the telecommunications sectors. “These are businesses of the future and their recommendations would be valuable in future-proofing the economy,” it said.

PBC’s overarching theme is “Make-in-Pakistan” with the objective of creating jobs, promoting value-added exports and encouraging import substitution on a sustainable and competitive basis.

“We note from the TORs that protection and subsidies to SOEs and industries are to be addressed,” the PBC chief said and added, “We do not support open-ended indefinite protection beyond offsetting Pakistan’s cost of doing business and which works against the long-term public interest”.

The PBC letter notes that the TOR does not cover exports explicitly nor does the EAC include the Ministries of Commerce or Industries in view of the fact that Pakistan’s major challenge is to grow and diversify its exports. It recommends that these ministries be included in the EAC as it will also be useful in the analysis of cost and benefit of import protection as the National Tariff Commission falls under Commerce. The PBC’s recommendations on a National Charter for Exports are available and also have recommendations on reindustrialising the country.

“The country faces significant economic challenges and as an interim government, your urgent attention will no doubt be on restoring fiscal prudence,” the letter stated.

PBC hopes that through the EAC, the PM will also have an opportunity to begin some of the fundamental reforms in energy, broadening the tax base, addressing loss-making state-owned enterprises and privatisation, improving public debt management, and dealing with the growing pension liability - even if it is to agree a direction through a Charter of Economy.

The PBC also urged the Prime Minister to also consider reforms of the National Accountability Bureau law to address the decision-making paralysis.

“The council looks forward to working with the government in the interest of Pakistan’s inclusive and sustainable growth,” the PBC chairman said in the letter.

It said that PBC was a research-based pan-sectoral advocacy body composed of the country’s most prominent long-term investors, both local and multinational.

“Unlike trade associations, we do not promote the interests of any single sector. Nor do we have a country-of-origin bias. Our research and evidence-based advocacy is for the greater good of the country,” letter stated.