LAHORE - President of Lahore Chamber of Commerce & Industry Mian Nauman Kabir on Monday fully supported Prime Minister’s idea of national dialogue and charter of economy.

“The private sector has always supported all measures aimed at economic wellbeing of the country”, Mian Nauman Kabir said in a statement. The LCCI president said that national dialogue on all economic issues is a sure-shot to ensure sustainable development. He said that the Lahore Chamber of Commerce & Industry is ready to play its due role in this regard as national dialogue and charter of economy are need of the hour. He said that the economic state-of-affairs demands a collective and instrumental approach from the political parties as the ongoing political scenario is pushing the economic affairs towards no point of return.

The LCCI president said that we have to succeed in formulating a comprehensive strategy on the problems facing our economy and their possible solutions and nothing can be better than the charter of economy. He said that though the economic indicators have started moving in right directions but still the country is facing various challenges. Mian Nauman Kabir said that the inflation, trade deficit, rising internal and external debt repayments are some of the major reasons of economic meltdown. He said that one of the main reasons for these economic difficulties is the extreme lack of a national economic policy. He said that one of the major issues is that as soon as a new government comes, the existing economic policies are scrapped. He said that local investors and businessmen are facing uncertainty and foreign investors are also not interested which is a matter of concern.

Mian Nauman Kabir said that in this scenario, it is very important for the country to have a unified Charter of Economy by the political parties in order to ensure continuity in economic policies despite the change of government. He added that it has become very important to increase the share of value added and IT exports. He said that the country needs to focus on import substitution to reduce the trade deficit. He said that we need to upgrade our manufacturing sector. African countries and Central Asian states have immense potential to increase exports but our exporters are reluctant to do trade in these markets due to lack of banking channels. He said that the State Bank of Pakistan can play a key role in this regard. The LCCI president said that the dynamics of each sector are different, so it is important to formulate sector-specific policies in consultation with the stakeholders so that we can increase the potential sectors of our economy such as engineering, pharmaceuticals and halal food exports. He said that Pakistan’s tax-to-GDP ratio is around 10% which is very low in principle which should be at least 20%. He said that immediate tax reforms are needed to increase the tax base, which is limited to 3 million, and achieve the desired tax targets through direct taxes instead of indirect taxes. He said that the collection does not happen at all or at low rates, they should also be made part of the tax net so that they also make tax payments as per GDP contribution.

“We also need to improve our tariff policy”, Mian Nauman Kabir said and added that the government should abolish duty on all raw materials which are not available in Pakistan. Mian Nauman Kabir said that the reduction in production cost should also be an important part of the Charter of Economy. Energy cost in Pakistan is very high due to which our goods are unable to compete in foreign markets. Reducing electricity and gas tariffs has become essential to improve export competitiveness. At the same time, we need to pay special attention to renewable energy and energy conservation.

He said that one of the main reasons for the low growth rate of our economy is the backwardness of the agricultural sector. The development of corporate farming and agro based industry will not only increase agricultural production in the country but will also create new employment opportunities and attract foreign investors. He said that the number of small and medium enterprises in Pakistan is more than 5.2 million while their share in GDP is about 40%, but their potential has not been fully utilized yet. Mian Nauman Kabir said that all the political parties should response positively to the Prime Minister’s call for national dialogue and charter of economy.