ISLAMABAD   -  All Pakistan Business Forum (APBF) President Syed Maaz Mahmood has said that ever-increasing cost of produc­tion in the country is the real threat to small-scale busi­nesses (SMEs), as frequent upward revisions in policy rate and continuous fluctua­tions in rupee against dollar are posing further threat to the economy.

In a statement issued here on Saturday, he observed that the aggressive economic mea­sures, high borrowing rates, inflation, oppressive taxation and unstable currency have been negatively affecting running businesses, many of which have closed their op­erations, while the remaining are struggling for survival. 

With a view to deal with fiscal challenges, Syed Maaz Mahmood asked the upcom­ing elected government to work on the three-way strat­egy by implementing short-term goals that will help to keep generating resources for smooth fiscal operations, medium-term goals where the government should fo­cus on financial inclusion, documenting the economy by designing a system where all businesses can be reg­istered and properly docu­ment their income including collection of sales tax, initi­ating the process of privati­sation as well as improving governance by introducing reforms in each sector. 

The APBF president said as a long-term goal, the country must focus on improving its human capital, and revamp­ing IT sectors by extending facilitations and providing all the requisite supports. In the same way, we also need to work on designing a compre­hensive and proactive strat­egy to tackle challenges re­lated to strengthening border security and implementing effective and comprehensive Anti-Money Laundering and Terrorist Financing measures holding accountable and tak­ing to task all those who are involved in illegitimate ac­tivities, undermining both our economy and national inter­ests, he added. APBF Chair­man Ibrahim Qureshi said that the government does not have any pragmatic plan to address this liability, apart from asking for more loans to repay existing debt. Likewise, the target for current financial year’s exports is too low to meet the country’s revenue. 

Ibrahim Qureshi said that the conventional approach of focusing solely on improving exports while pursuing a pas­sive and imprudent foreign policy towards neighbouring countries, poses a significant challenge in meeting export targets. Despite strained re­lations, the United States re­mains the largest importer of Pakistani products. Still, there are no efforts to tap into the vast markets of neighbouring countries or negotiate trade agreements with them. 

The APBF president said that even though Pakistan and China enjoy close relations, yet the volume of exports to China is significantly lower compared to USA. Further­more, the existing Pakistan China Free Trade Agreement (PCFTA) tends to benefit Chinese-origin corporations more than Pakistani busi­nesses, giving them greater market access at the expense of Pakistani products. 

Syed Maaz Mahmood said that the government is ne­glecting two important fac­tors, namely, Information Technology and export of human capital that together can contribute towards gen­erating foreign exchange and mobilising revenue. It is essential to concentrate on nurturing a skilled workforce and assisting them in secur­ing international employ­ment opportunities. This ap­proach would have a positive impact on our foreign policy and help in building foreign exchange reserves. Given the era of the fourth industrial revolution, Pakistan should prioritise facilitating IT busi­nesses, enabling their access to international markets. By doing so, we can assert our fair share in the international market for IT-related exports.

It is good that State Bank of Pakistan has outlined the central bank’s vision for the future, with a strong focus on price stability. The SBP further emphasised the need to expand access to financial services for a larger segment of population and revealed that under Vision 2028, ef­forts would be made to bring more people into formal fi­nancial system. Furthermore, SBP is planning to connect Pakistan’s remittance system with Arab Monetary Funds (AMF) Buna, a cross-border payment system. This inte­gration is expected to sig­nificantly improve speed and reduce cost of remittance transactions. Although above measures would improve our financial system, yet the gov­ernment should reconsider its approach to expanding the tax base, as it currently burdens existing taxpayers instead of including new sectors.