Govt must announce the soft package for new and existing industries endurance
Interview with Mr Khalid Tawab – Chairman, Tawab Group of Companies
PAGE: Tell me something about yourself and your organization, please:
KHALID TAWAB: I am Chairman of Tawab Group of Companies which is a renowned name in the manufacturing of paper, board and steel. I have served as Senior Vice President and Vice President of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Karachi Chambers of Chamber Industry (KCCI). I am honorary Consul General of Mozambique since 1989. President of Pakistan awarded me Sitara-e-Imtiaz in 2009 in recognition of my outstanding public services. My company got FPCCI Exports Awards two times and International Asia Award one time due to highest exports. I am philanthropist and trustee of Aiwan-e-Tijarat-o-Sanat Hospital.
PAGE: How would you comment on the growth of LSM in Pakistan over the period of last five years?
KHALID TAWAB: During the last five years, the growth of LSM rose from 5.46 percent to 6.14 percent, which is not enough for the prosperity and development of Pakistan. Pakistan needs at least 10 to 12 percent of growth in large-scale manufacturing (LSM) so that the trickle down effects of industrialization can be transformed in all groups of income and create new employment opportunities. There are a lot of opportunities in manufacturing sector if government seriously takes steps and provides incentives to industries as our regional countries India, Bangladesh and China are given in terms of tax holidays, allow duty free imports of raw material and machinery, subsidies for exports etc.
PAGE: What are your views on the industrialization in Pakistan?
KHALID TAWAB: Industrialization in Pakistan is the need of the hour because industry is the only sector which contributes in real growth and has forward and backward linkages with other sectors. In other words, the expansion in industries also expands the other sectors of the economy. Industrial sector has the capacity to absorb the huge amount and skilled and unskilled labor and to contribute in long terms of economic growth. If you see the economic growth of 1960s, 1980s and 2000s, there is industrialization behind this growth.
PAGE: Should or could Pakistan replicate the 1960s model of Japan & South Korea?
KHALID TAWAB: Today’s structure of economy is different compared to 1960s structure. At that time, the share of agriculture sector was greater in national income and now the share of industrial sector is larger in the economy. Now Pakistan needs to adopt innovation and inventions policy for industrialization. We need technological advancement and adoption of new technology in all sectors. The world is moving towards e-commerce and we are still using the old technology for trade.
Japan and Korea started their journey of growth from small and medium enterprises and now these enterprises contribute more than 90 percent in their economy and exports. We should also adopt the model of Korea, Japan and other East Asian countries but at some extent and adopt inward looking policy to fulfill the demand of our country with our resources instead of looking to China and other countries. This policy will help in industrialization and creation of employment opportunities.
PAGE: Do you think the government seems serious enough to promote import substitution concept to get rid of trade deficit?
KHALID TAWAB: Government is very serious to promote the import substitution and reduction in trade deficit. In this respect, regulatory duty has been imposed on several items and we have requested the government to increase the regulatory duty on those products that are currently produced in Pakistan and are affected with imports from China and other countries for low cost. It is a fact that the quality of Pakistani products is very good but they are not competing in international market due to high cost of doing business and cost of production. Moreover, the packaging of our products is very weak. We can bring good prices of our products by improving packaging of products.
We have suggested many industries to government wherein there is huge scope of growth and which can enhance economic growth and create employment opportunities like housing and construction industry, tourism industry, automobile, textile, plastic, leather industry etc. With the growth of housing and construction industries 72 allied industries will grow. Moreover, with the growth of tourism hospitality, hotel and restaurants, art, handicraft, transports, recreational and culture related industries will grow which would attract the foreigners to visit Pakistan and give message to the world of the soft image of our country. Like these two industries, the growth of other industries will also enhance the growth of their sub-industries and reduce our trade deficit.
PAGE: Your views on the facilitation to the business community by the incumbent government:
KHALID TAWAB: Business community is looking towards the government for providing facilities to businessmen of different sectors. In this context, FPCCI team has held meetings with the Prime Minister, Finance Minister and Advisor to Prime Minister for improving the business environment in Pakistan. There is a need to make Board of Investment more active and vibrant body for presenting investment friendly policy which attracts domestic and foreign investors by providing one window policy.
There is a high cost of doing business in Pakistan and recent rise in the prices of utilities further makes our industries uncompetitive. There are huge amounts of exporters’ refunds pending, which the former government didn’t clear. Moreover, weak infrastructure and rising transportation cost are other issues, which need government’s attention. The government should announce the package for the new and existing industries so that they compete in the international market.