Photo courtesy PID
Businessmen of Karachi on Wednesday lamented high energy costs during a Q&A session with Prime Minister Shehbaz Sharif, stressing it was “almost impossible” to increase exports and reduce business costs in the prevailing situation.
During a visit to the Sindh capital, the prime minister—accompanied by members of his cabinet and leaders of the provincial government—met the city’s business community, and sought their input for improving the country’s economic standing, particularly with regards to boosting its exports. After a brief address, he opened the floor to the gathered businessmen, who offered various ideas for how the government could go about facilitating various industries.
In a presentation, Trade Development Authority of Pakistan (TDAP) chief Zubair Motiwala noted concerns with the government’s ambitious plans for economic growth amidst the prevailing situation. “The prime minister is keen to support the industry by doubling exports and reducing business costs but it seems impossible in the current situation,” read a point of his presentation, noting costs of doing business had ballooned due to recent hikes to gas and electricity prices.
Lamenting that prevailing prices would soon lead to Pakistan losing its competitive edge in exports markets, the presentation noted that gas tariffs had spiked to Rs. 2,600/unit for industrial heating and Rs. 3,100/unit for captive power. Comparing to last year’s rates of Rs. 1,150/unit and Rs. 1,350/unit, respectively, it stressed that businesses could not afford to survive In the current international market with such massive hikes.
“The industry is willing to pay 100 percent of the gas price without any subsidy. We don’t want any subsidy. We just want the industry to get a fair gas price,” said Motiwala, pointing to capacity charges of power plants as putting undue burden on Pakistan, as they require hikes to electricity rates that lead to reduced consumption and surplus electricity that no one is willing to utilize. “This unnecessary capacity is also increasing the circular debt issue in the power sector. Therefore, it is necessary to introduce a scheme to reduce the flat tariff for industrial consumers, which will increase electricity consumption and also help reduce the circular debt issue,” he claimed.
Seeking stability
Another prominent businessman, Arif Habib, praised the prime minister for securing an International Monetary Fund (IMF) bailout last year, but noted that more work was needed. “I suggest you do a few more handshakes,” he said, referring to a picture of Sharif shaking hands with the IMF chief. “One of them is regarding trade with India, which would greatly benefit our economy. Secondly, you should also [shake hands] with a resident of Adiala Jail. Try to fix things at that level as well and I believe that you can do it,” he said, referring to Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan.
While the premier did not respond to the question on political stability, he stressed that he had noted all concerns of the businessmen and would soon invite them to Islamabad to sit with the government and chalk out solutions to their problems.
Earlier, during his address, P.M. Sharif said the meeting was part of efforts to listen to the “brilliant minds of business, absorb what they say and put it into action” for comprehensive economic growth. “You all are great minds of business … Today we need you to take a step forward and bring this rental business to an end,” he stressed. “Let’s focus on genuine industrial and agricultural growth and double exports in the next five years. It’s difficult but not impossible. It’s an article of faith for me. I would listen to you and make a plan to put that into action,” he added.
The prime minister also referred to Bangladesh’s economy, saying he had often heard in his youth that “East Pakistan” was a burden on the country. “I was quite young when we were told that it’s a burden on our shoulders. … Today you all know where that ‘burden’ has reached. And we feel ashamed when we look towards them,” he added.
Upon his arrival to Karachi, Sindh Governor Kamran Tessori and Chief Minister Murad Ali Shah received the prime minister. He also visited the mausoleum of Quaid-e-Azam Mohammad Ali Jinnah to pay his respects. During his meeting with Shah, Sharif assured the federal government’s full support in resolving issues facing the provincial authorities.
“We will work together like brothers, like a team in the interest of the people of Pakistan,” said the prime minister, emphasizing that working together was the only option for the sake of progress and prosperity and there would be no compromises on this.