Wednesday, October 01, 2014 – Shahnawaz Akhter –
KARACHI(the News): The Karachi Chamber of Commerce and Industry (KCCI) have called for the establishment of import substitution industries for the reduction of trade deficit.
Abdullah Zaki, the outgoing president of the KCCI, presented a detailed review at the 53rd Annual General Meeting held on Tuesday, stating that to reduce the trade gap, a product-wise roadmap is needed to be prepared by the ministry of commerce and Trade Development Authority of Pakistan (TDAP).
“The trade deficit can be diminished revising and utilizing the Free Trade Agreement (FTA) and Preferential Trade Agreement (PTA) with friendly countries and penetrate Pakistani’s exports–oriented products to bridge the trade imbalances,” Zaki said.
The outgoing president also suggested that the government should focus on regional trade with SAARC, ASEAN and ECO Countries, Central Asian Republics, China and Middle East.
The chamber urged the government to evolve a legal framework to protect exporters from unforeseen incidents such as consignment losses.
“Existing industry should be protected and facilitated. Fresh investment is made to increase export to fill the gap between import and export,” according to the review.
It said that the POL products should be imported from friendly countries like Saudi Arabia and Iran to overcome the trade deficit temporarily.
The trade body advised the State Bank of Pakistan (SBP) to bring down the key policy rate at five to six percent. In this regard, the government should control inflation within the range of single digit.
“Besides, export refinancing rate should be set less than five percent,” the review recommended.
The Karachi Chamber of Commerce and Industry said that the country is currently facing the worst power crisis and the government should establish alternate energy solutions for increasing production and exports.
“Presently, the power tariffs have been increased to the highest limit in the history of Pakistan. In the prevailing situation, the cost of energy in Pakistan is higher than India and Bangladesh, which is rendering local businessmen in the country uncompetitive in the region.”
The chamber said that due to energy crisis, industries had to lay off workers at a massive scale since they are constrained to work under-capacity.
To overcome energy shortfall, the Karachi Chamber of Commerce and Industry suggested utilization of coal deposits and alternate resources such as wind and solar energy.
NEPRA and OGRA are white elephants and should be shelved said the KCCI and recommended that public sector entities like PIA, Pakistan Steel and Pakistan Railways should be privatized.
The Karachi Chamber of Commerce and Industry also pointed out that the major burden of tax is on business sector, whereas income tax on agriculture, which has one-fifth share in the GDP is less than one percent.
“Therefore, agriculture sector should be brought into tax net,” it recommended. At the AGM the outgoing office bearers of the chamber presented past year’s performance.
The newly elected body for the year 2014/2015 assumed the charge at the meeting. Iftikhar Ahmed Vohra, took over the charge as president of the chamber.