Tuesday, November 23

'No room for short-sighted policies'

AAMER WAQAS CH talks to the LCCI president Dr Khalid Javaid Chowdhry about the Budget and grey areas of economy needing an immediate relief measures and attention of the government

Our economy has been adversely affected by the post-Black Tuesday scenario and the present stand-off between India and Pakistan, that seems to be aimed at weakening Pakistan economically apart from gaining other objectives and vested interests by New Delhi. The president of the Lahore Chambers of Commerce & Industry Dr Khalid Javaid Chowdhry dilates upon the issues confronting to our beleaguered economy and much-needed steps on the part of the government to build confidence of the domestic and foreign investors.

On the grey areas of economy that warrants relief, Dr Khalid Chowdhry is of the view that the LCCI firmly believes that the foreign investors would be more interested in the oil and gas exploration sector, provided they are given certain tangible concessions.

"But domestic investors should be the prime focus. If they start investing here, then the foreign investors would follow in their footsteps. Facility should aim at the idea of 'leaving some room for wealth creation to them'. When the domestic investor smells money in his homeland, he would definitely invest here. Later on, when this smell travels abroad, the foreigners would definitely come here even if the law and order situation is worse. For that idea to materialise, our local investor should be made happy by giving conducive policies.

"Our demand is that the import duty on raw material should be brought to Zero. On the same pattern, farmers should be provided fertilisers, hybrid seed, energy (water) at affordable rates along with other economical packages. With Agri-sector prospering, our exports would be higher, thereby causing a positive trade balance. This can only be possible through good policies and special industrial packages. The Industry should be free of irritants and hiccups to become more competitive in the international market, because bulk production always helps reduce prices considerably. Hence the economy would be turned into export-led growth earning billions of dollars of foreign exchange consequently helping us in building up massive foreign reserves - inflated kitty at government disposal would enable to pump some capital in the local economy; pay back country's long-standing loans and live like an honourable nation.

"I feel that the CBR is holding back concessions. Despite certain constraints as portrayed by the government, there is a way to get out of this imbroglio. It only requires a determination to do so. We should look to other countries with prosperous future. Consider Bangladesh with an export of $ 98 billion. Why can't we have it here!"

On which areas or sectors should be protected in new tariff, Dr Chowdhry said that he does not believe in protection of areas. "It is more of a relief or facilitation. Policies are the problem in the country. The government should consider us as partners, and this relationship should be developed as a family partnership. We should be willing to take risks with each other. Malaysia's success story is a tangible proof of it. We should be motivated and try to forge a competitive edge over others. How to achieve it, is a matter with the policy-makers, who should be developing business friendly policies. Bring in more indirect taxation so that more revenue can be generated. Direct taxation cannot be very fruitful in the present circumstances.

"We have raw material and cheaper labour, hence production should be increased. Our producers should be quality conscious and try to have a competitive edge over others."

He strongly believes that the government should shift its policy from revenue generation to growth increase. "We should go for the growth and revenue would come automatically. Do not give the hungry a fish rather ask him to fish for himself. This has happened in Malaysia and its has become a prosperous country even with a far less population than ours. Dr Chowdhry considers that the growth rate figure, as given by the government, is not morale boosting for a vibrant economy. "It should be between 7-9 percent. This figure is not encouraging and they should improve it to minimum of five percent, which must be maintained for at least two years initially.

Dr Khalid Chowdhary does not agree with the inflation rate. "Sometimes I doubt it. On what basket they are basing it on? But as my government is saying, so I believe in it." He is of considered opinion that due to problem-after-problem situation with the government, our export has not improved over the years. "Sometimes there is an image problem. Then comes another propaganda of my country being a nursery of terrorists. It has been a replay of falling from one ditch to another, mostly created by others. "But with the present state of higher reserves of foreign exchange, it is very easy to bring in financial stability by developing small sectors and lowering down of interest rate, and with more production resultantly generating bigger revenue. On the adverse effects of the stand-off between Pakistan and India on the budget, Dr Chowdhry is certain that the budget would be a business friendly.

"I hope that they won't disappoint us with further taxes. A lot of communication has been maintained between the government and the private sector. "This tension will not create any negative effect on the budget. A huge expenditure is being endured by the government due to the high alert situation, which has to be recovered from somewhere. India is wilfully doing so to make our economy fragile. Actually this war mongering is on the economic front. Our government is behaving positively and trying to protect the local industry, which is appreciable under the present circumstances."

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