Chairman Pakistan Industrial and Traders Associations Front (PIAF) Faheemur Rehman Saigol has asked the government to take prompt measures to bring down the production costs for trade and industries to enable them to compete in the international market. He said that trade and industry was currently having difficulty to compete the global market because of rapid increase in production costs. He said that the high cost of production was not good for our exports. “The cost of production is a major factor, which makes an industry stand out among competitors in the world market,” he explained. Faheemur Rehman Saigol said that high energy tariffs, shortage of fuel for machines, high rate of taxes, and lack of skilled labor are the main reasons behind the increase in the cost of production. He expressed concern that the reduction in industries’ contribution to Pakistan’s gross domestic product (GDP) is a worrying trend. “Manufacturing and production industries have the potential to significantly impact economic growth by reducing unemployment in the country. The government needs to take solid steps to make doing business easier,” he added.

He said lack of research and development (R&D) is one of the major reasons behind the increase in the cost of production in any industry. “Sometimes we have the resources, but we make poor decisions. A poor decision means poor practices of work execution,” he added. He said that R&D could help in the provision of valuable technologies, business models, and designs for the industry. “Implementation of modern techniques or work practices can increase production and also reduce its costs,” he added. The PIAF Chairman said that both external and internal issues lead to an increase in cost of production. He said Pakistan’s industry is struggling in the international market due to challenges such as high inflation, political instability, increased power tariff, rising fuel costs, energy shortages, and lack of R&D. “An effective strategy is needed to improve the performance of the industrial sector. The government should facilitate exporters by providing a level playing field to them in terms of business costs, particularly in utility pricing,” he suggested.

Saigol said Pakistan’s economy, particularly small and medium-sized enterprises (SMEs), was struggling to cope with the current economic crunch, and needs support. “Rather than providing subsidies or waivers, the industries are being burdened through rising production cost. The burden of surging oil prices in the international market is immediately transferred to consumers by the government, but the process of reducing prices is always very slow,” he noted. He asked the government to work on a fast track plan to address expansive energy issue and priority should be given to the value-added industry in this regard. The Chairman PIAS said that Pakistan’s core issue was the high cost of doing business, which the government needed to bring down to bring the local as well as the export industry at par with global competitors.

The chairman urged for increasing ease of doing business, lowering cost of production, paying early refunds to solve liquidity crunch, relaxing import policy for industrial raw material, and equalizing the energy tariff across the country. He said Pakistan was at 147 out of 190 countries on the global ranking of doing business mainly due to bureaucratic hurdles. He said various provincial departments, including EOBI, Social Security, Women Welfare, Environment Department etc were playing a negative role and treating the manufacturers and exporters like criminals. Saigol called for giving a boost to the export sector by adopting diversified marketing techniques and extending practical support to the industry, and asked the exporters to prepare themselves for meeting the global challenges so that exports could be enhanced by fully exploiting new opportunities.

Credit: Independent News Pakistan