KARACHI: Pakistan’s business community has mourned the demise of Dr. Abdul Qadeer Khan, who was legendary scientist and father of Pakistan’s nuclear program.
Mian Nasser Hyatt Maggo, President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), in a statement said that the entire business, industry and trade community of Pakistan is mourning the demise of the legendary and celebrated scientist and father of Pakistan’s nuclear programme Dr. Abdul Qadeer Khan.
FPCCI Chief added that Dr. AQ Khan lived an accomplished life and lived the dream of Pakistan to the fullest. He inspired and motivated three generations of Pakistanis and will continue to inspire and influence the future generations to come.
Mian Nasser Hyatt Maggo said that the nuclear programme of Pakistan has effectively made the country’s defense invincible from external threats and has provided a secure environment for socio-economic growth of Pakistan.
FPCCI will hold Fateha Khawani in all its office countrywide for the departed soul and to commemorate Dr. AQ Khan’s unparalleled contributions to country’s defense, academia and philanthropic landscape.
Mian Nasser Hyatt Maggo, President FPCCI, in a statement on Friday expressed his profound concerns over yet another gas supply suspension for 72 hours for the industrial areas of Sindh and Balochistan.
It will bring many export-oriented industrial units to a halt and ensuing losses, he added.
FPCCI Chief pointed out that after every few months the industrial sector has to endure the prolonged gas supply suspensions; despite repeated promises and assurances given to the business, industrial and trade community of Pakistan from the platform of FPCCI.
Mian Nasser Hyatt Maggo maintained that governments all over the world protect the industries from unplanned gas and fuel outages; and, also help them ward off the adverse effects, if the suspensions occur.
FPCCI President forewarned the government authorities that during winters there could be an unprecedented gas shortage and the country’s exports can be gravely impacted; and, the government should sit down with the business community at the earliest to chalk out a plan to protect the export-oriented industries from inevitable gas shortages.
Mian Nasser Hyatt Maggo, as President FPCCI, has reiterated his full support to facilitate consultative process between government authorities and the business community before the winter starts. FPCCI wants to support the government’s vision to enhance Pakistan’s exports in a fast-paced; yet, sustainable manner, he added.
In a statement, FPCCI President Mian Nasser Hyatt Maggo, demanded the Federal Board of Revenue (FBR) to extend the deadline for tax filing by two months to facilitate the business community and support the government’s drive to broaden the tax base and collect maximum taxes.
FPCCI Chief, referring to the fast-approaching deadline of September 30, 2021, i.e. Thursday; and, recommended to the authorities that on the basis of feedback from businesses across Pakistan, FPCCI maintains that hundreds of thousands of SME owners will not be able to file their income taxes by Thursday.
Mian Nasser Hyatt Maggo said that FBR has notified a daily surcharge of 0.1 per cent for delayed filing on taxable income; which is not only harsh but also impractical as it translates into 3 per cent per month and 36 per cent per annum.
The maximum surcharge by FBR should not be more than KIBOR plus 2 per cent; which also happens to be the rate when FBR delays the processing of tax refunds.
Mian Nasser Hyatt Maggo, as President FPCCI, has reiterated his stance that FBR should stop taking one-sided radical anti-business decisions; instead, should have a detailed consultative process with the business, industry and trade community of Pakistan and FPCCI is ever-ready to provide its platform as their apex representative body.
He said that the burden of the surge in oil price in the international market is immediately transferred to masses by the government but the process of reduction in the prices is always very slow.
Nisar said that the economy of Pakistan, particularly the SMEs are striving to deal with the post-corona economic crunch and need to get support.
Instead of providing subsidies or waivers, it is unjust to overburden the industries with a hike in the cost of production. An increase in petroleum products costs will further weaken the economic environment which is already under threat on various fronts.
He said that there is no denying the fact that oil rates have been on the rise in the international market now, but the government instead of passing on this surge to the public can reduce the number of taxes on petroleum products as the fuel is the engine of growth.
If fuel would be heavily taxed, the entire economy would suffer unprecedentedly, he said, adding that petrol and HSD are two major products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 750,000 tons per month against the monthly consumption of around 800,000 tons of HSD.
The economy is already in a precarious situation, this constant back and forth will only increase volatility, when we ought to be heading for stability, he added.
He said that the cost of doing business and cost of production have shot up to the level of uncompetitiveness. The cost of borrowing was huge and capital financing has become more expensive.
The business leader said Pakistan exports cannot compete with China, Bangladesh and India where power tariffs were 7-9 cents, particularly in the post-corona economic slowdown as the country’s exports have been witnessing a major setback in present days due to the high cost of electricity, which has become a major stumbling block in industrial development and boosting exports.
He said that fuel and electricity are regarded as the lifeline of any economy and play a pivotal role in the socio-economic development of a country.
Mian Anjum Nisar said that industries need low-cost energy to bring down their cost of production, keeping their goods competitive in the international market. He said that the government, in present circumstances, would have to reduce the price of electricity along with the cut in the prices of petroleum products to bring down the cost of doing business and to promote industrial activities.
He said that due to the COVID-19 pandemic, business activities were already in decline and in this situation the government should take serious steps to cut the cost of doing business, as hike in oil rates would further enhance the cost of production, making transport more expensive.
It is to be noted that in a fortnightly review of petroleum products for the second half of September, the price of petrol has been increased by Rs5.00 per litre. The new price of petrol is Rs123.30 per litre, which was Rs118.30 per litre or a 4.2 percent increase.
Mian Anjum Nisar observed that with a view to improving the cash flow of businesses at this crucial time, the government will have to facilitate the industry through the reduction in tax ratio on all items including the oil products, besides lowering the markup rate. He said that at a time when country’s GDP ratio was very nominal amidst high cost of doing business, the industry needs maximum support and relief.
FPCCI former chief and BMP chairman said that high-speed diesel is used mostly in the transport and agriculture sectors. Therefore, any increase in its price will lead to an inflationary impact. The price of light diesel oil has also been hiked, which is used in industries.
A monetary policy survey – conducted recently prior to SBP’s Monetary Policy Committee (MPC) meeting later in this month – conducted by Policy Research Unit (PRU), Policy Advisory Board, FPCCI has recommended a reduction in the policy rate by 50-100 basis points.
The FPCCI recommended that key policy rate should not be above six per cent to promote business activities and economic growth.
The president of the apex body Mian Nasser Hyatt Maggo in a statement on Monday said that the policy interest rate must not be over 6 per cent. “And if SBP wants to promote business activities and economic growth in the country, it should be brought down to 5 per cent.”
He also pointed out that policy interest rate in the region is 3-4 per cent only and we have to compete with the region.
FPCCI has recently established Policy Advisory Board under the chairmanship of former Federal Secretary Mohammad Younus Dagha.
It aims to provide research-based expert input for policy advocacy, ease of doing business initiatives and formalizing the business community’s inputs on policies to various governmental departments, institutions and departments.
Policy Advisory Board of FPCCI aims to formalize collective opinion of the private-sector for the formulation of business-friendly policies; with an objective to foster economic growth and development.
The survey results show that 84 per cent of the businessmen and researchers in monetary policy suggest that there should be no increase in the policy rate and nearly half of them suggest a cut between 50-100 bps.
The policy brief issued on the occasion has noted with a sigh of relief that the core inflation in Pakistan – the most definitive indicator for setting up the policy rate for any central bank – has significantly subsided to 6.3 per cent in August 2021 as compared to 6.9 per cent in July 2021.
KARACHI: The two central banks of Pakistan and Iran should devise a mechanism for swift payment in order to enhance bilateral trade between the two countries.
Mian Nasser Hyatt Maggo, President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said on Tuesday while welcoming Hassan Nourian, Consul General of Islamic Republic of Iran in Karachi and Mahdi Amir Jafari, Third Consul for Economic Affairs, at the Federation House, Karachi.
Primarily, the two central banks need to devise a mechanism for smooth and swift payment systems for the bilateral trade as the starting point in the right direction; as that will give confidence to traders on both sides, the FPCCI president added.
The FPCCI is very keen to enhance bilateral trade between the two countries and for that matter removal of the bottlenecks is warranted; namely, lack of banking and financial channels; absence of barter-trade agreements or mechanisms at governmental level and unfair geopolitical pressures.
He explained that the central/state banks of the two countries and apex chambers of commerce and industry need to come closer; and, we can immediately start the consultative processes immediately at various levels through webinars. He also offered FPCCI’s assistance and its platform for making efficient and tangible linkages.
Maggo also requested Export Guarantee Fund of Iran (EGFI) to extend their funding guarantees to more traders with enhanced limits and play a role of a catalyst.
He added that he is worried on the COVID situation in the brotherly country of Iran and hoped that Iranian people will soon overcome the menace on the back of their ever-persistent resilience and high hygiene standards.
On the occasion, Hassan Nourian said that the formal trade between the two countries stands only at $1 billion and it is too low; given the fact that the combine population of Pakistan and Iran is 300 million.
He added that there might be informal trade along the lines; but, the two countries must work in tandem to progressively increase the bilateral trade on a sustainable basis.
Hassan Nourian emphasized that the quality of Iranian products is world-class and Iranian industry buys their plants mostly from best manufacturers.
He also appreciated the willingness of Pakistani Embassy in Iran for supporting enhancement of bilateral trade.
Hassan Nourian pointed out that there is still a huge untapped potential for Pakistani fruits in Iran; particularly, various varieties of mango. He also emphasized that petrochemical industry is very advanced in Iran technologically and can greatly help Pakistan with their foreign exchange strains.
Hanif Lakhany, Vice President, FPCCI, pointed out that tariffs are playing out as a major hindrance; as the tariffs are very high on both the sides; and, that results in rendering bilateral trade uncompetitive.
Nasir Khan, vice president FPCCI, said that during a recent meeting with State Bank Governor, FPCCI raised the issue of lack of banking channels with Iran and the SBP has asked to discuss the matter further in the light of currently in place bilateral mechanisms between Iran and other countries, like China, India, Turkey, etc.
In a statement issued on Saturday, he urged the government to control instability of rupee against the US dollar, as the greenback has appreciated 7.15 per cent since May this year, hitting 10 months high to cross the Rs164 mark.
FPCCI’s Businessmen Panel Chairman Mian Anjum Nisar observed that the industrial expansion and economic growth is not possible without stability of local currency, as the dollar has been appreciating against the rupee for the last more than 10 months because of the higher current account deficit and burgeoning import bills.
FPCCI former president observed that the market-based flexible exchange rate system, resilience in remittances and other factors can help contain the current account deficit in a sustainable range of 2-3 percent of GDP in FY22.
He said that the rising of dollar is not logical despite the fact that the State Bank says Pakistan’s external position was at its strongest in 10 years with 0.6 per cent current account deficit in FY21.
Since the May this year, the dollar has been appreciated by 7.15 per cent against the local currency which lifted the cost of imported products and created uncertainty about the exchange rate stability.
The dollar was at Rs164 in October 2020 and now again hovering in the range of Rs164 in Aug 2021.
Since the beginning of the new financial year the exchange rate looked a shaky as the local currency lost almost 4 per cent against the US dollar. The market reacted over the policy-makers’ announcement about 2-3 per cent current account deficit, while the importers rushed for higher amount.
He said that trade and industry have no idea as to what is the real exchange rate needed by the central bank and which is the end point for depreciation of rupee. Though the exporters would get some benefit against their export proceeds but the overall economy would face a tough time as the cost has been rising and finally it would affect consumption, which is the main wheel to run the economy.
Although the central banks’ foreign exchange reserves are in a better shape, but it has to rely heavily on borrowing to keep it at around $18 billion which affects the local currency value negatively.
He said that Pakistan has received record $29.4 billion remittances in fiscal year 2020-21 and it again received $2.7 billion in July FY22, indicating that the new financial year would also get help larger than the entire exports of the country, which is not long-term solution.
Besides increasing exports and controlling imports the government will have to take administrative measures, as a large demand of cash dollars are seen in the market. Mian Mian Anjum Nisar appreciated the positive development related to economic indicators, urging the government to control volatility of rupee against the US dollar, showing that exchange rate is not managed by the State Bank of Pakistan (SBP) but it also indicates the exchange rate is not stable.
He said that the end of previous fiscal year with rising current account deficit was a serious blow to the exchange rate while the fear of higher demand of dollars further exacerbated with the information of the SBP that the county would need $20 billion to repay loans.
Nisar said that the import bill of $6 billion in June this year was enough to signal the market that demand of dollar was very high. He said that the rising instability in Afghanistan has stirred fear within Pakistan that may hurt the normal economic life in the country, motivating people to buy dollars. At the same time, exports to Afghanistan have come down to almost zero level.
Formal and informal exports to the country are in the range of $1.5 billion to $2 billion per year. Mian Anjum said that the fourth wave of Covid-19 is another negative force to depreciate the local currency and shatter the confidence.
Terming rupee depreciation against dollar a mysterious development, he said that continued fall of rupee is not understandable with the fact that there was no fundamental change in the country’s economic indicators.
The apex trade body said the decision would result in major losses to the industry.
He added that all industries should be allowed to operate seven days a week and continue their production – unabatedly.
Mian Nasser Hyatt Maggo also stressed that the restaurants should be allowed to continue 24 hours takeaway and delivery services.
He also suggested that in order to facilitate common man, all grocery stores in the province should be allowed to operate seven days a week till 8 pm.
Mian Nasser Hyatt Maggo maintained that Pakistan’s economic hub Karachi should not be completely locked down in the larger national interest.
He recommended that the only solution out of the current situation – without causing any harm to businesses and employment opportunities –is to allow business and economic activities under strict compliance of SOPs and mandatory vaccination of the workforce.
Mian Nasser Hyatt Maggo said that if industries and businesses remain under restrictions, we will not be able to pay salaries. He added that FPCCI is ever-ready to fully support the Government of Sindh in order to create a thriving economic environment in the province.
FPCCI hopes that its concerted appeal to the Government of Sindh will result in reconsideration of the strict decisions taken and will result in a more compliant environment in the province vis-à-vis COVID control –and, yet protect the economic and employment opportunities through taking all stakeholders onboard.
KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, has voiced concerns over the enforcement of new Standard Operating Procedures (SOPs) for COVID-19 prevention by the Sindh government.
