Muhammad Saleem

The government has been urged to take effective measures to help revive the small and medium-sized enterprise sector to create jobs and boost the economy. In an interview with WealthPK, the acting president of Faisalabad Chamber of Commerce & Industry (FCCI), Dr Sajjad Arshad, said that currently about 40% of SMEs have been closed for a long time. These units are nonfunctional because of high energy costs, unprecedented inflation, political uncertainty, delayed refunds, and inconsistent policies. He suggested that “without ensuring collaborative efforts of the stakeholders, including the business community, politicians, civil and military bureaucracy and judiciary, we cannot put the economy on the right track. Pakistan needs a strong and sustained economy and millions of jobs to tackle the persistent crises.” The FCCI acting president said that the chamber always stays in touch with the government so that the issues faced by the business community could be resolved on a priority basis. He said that Pakistan could not increase its exports without properly developing the SMEs and reducing the energy costs.

He compared the electricity rates in different countries and said that electricity is available in Bangladesh at eight cents, Vietnam at six cents, while in Pakistan it is 14 cents per unit. He said that the government had also raised the gas prices, leaving no room for the entrepreneurs to compete with their regional rivals in the international market. China is producing 50% of its electricity from solar and wind and the rest from hydropower. He asked the people in charge to ensure subsidised loans to the SME sector so that it could generate solar energy. He said that Pakistan has unlimited coal resources in Thar but it has failed to fully utilise them. He added that political uncertainty is also having a negative impact on the economy, leading to a decline in exports and remittances. He said that “we are finding it difficult to attract foreign direct investment due to the depreciation of the Pak rupee against the US dollar and the critical law & order situation,” and called for introducing long-term policies to stabilise the economy.

He mentioned the GSP-Plus status given by the European Union and said that the Pakistani entrepreneurs have not fully exploited the potential of the facility as they are still focusing on exports of traditional items. He said that “this facility will continue until 2027 and we must get maximum benefit from it,” and added that we are currently exporting rice worth $2.4 billion, while we have the potential to increase it up to $10 billion. Muzamil Ahmed, a thread factory owner, said that the role of SMEs in strengthening the economy could not be ignored. “However, it is ironic that the government always supports the big units and neglects the SMEs.” He said that the SMEs are struggling to pay salaries to workers due to the high cost of doing business. High electricity, gas and raw material costs are leading to factory closures and downsizing. He urged the government to discuss the matter of high energy costs with the IMF and announce a special energy package for the SME sector.

Credit: INP-WealthPk