For economic growth strong IPR system required
Karachi business leaders are advocating for a strong intellectual property rights (IPR) system in Pakistan, supported by technology, to harness the country’s resources and expand its wealth. President of the Karachi Chamber of Commerce and Industry (KCCI), Mohammed Tariq Yousuf, welcomed Chairman of the Intellectual Property Organisation (IPO), Farrukh Amil, stating that due to global integration, a competitive environment and technological advancements, the role of the IPO is critical for the country’s economic development but there is a need to ensure strict enforcement of IPR laws at the grass root levels. “A strong foundation for a vibrant IP system is needed to increase national wealth,” he said. The IPO chairman expressed his commitment to simplifying IP procedures through digitalisation under the IPO’s long-term strategy. He emphasised the need to simplify cumbersome IP procedures to allow individuals and companies to register their products, services, and other exclusive material using their smartphones, as is done in developed countries worldwide.
Industries suffering amid raw material scarcity
The Lahore Chamber of Commerce and Industry (LCCI) on Tuesday urged the government to formulate a policy on the import of raw material. In a statement released on Tuesday, acting LCCI President Zafar Mehmood Chaudhry warned, “Industrial closure due to an acute shortage of raw material will be a new phenomenon that is likely to disturb the government in the coming days.” He said that the banks’ refusal to issue LCs is delaying the industry’s access to raw material. As a result, both the industry’s ability to meet local market demand and volume of exports are declining. The LCCI president also said that the lack of availability of raw material is forcing businesses to lay off employees and shop owners to stop employing new employees, doubling the rate of unemployment. He warned that the already strained economy will suffer further if the raw material shortfall issue is not addressed urgently.
REER depreciates to 86.4 in Feb
Pakistan’s currency has hit an all-time low against a basket of currencies of trading partner countries, falling to 84.6 on the index in February, as the market-based exchange rate failed to sustain its fair value. The currency is considered to be at its fair value when it moves in the range of 95-105 on the index. According to data from the State Bank of Pakistan released on Tuesday, the real effective exchange rate (REER) – the value of the local currency compared to the basket of currencies of trading partner countries – depreciated by 7.52 to 86.4 in February 2023 compared to 93.96 in January 2023. The domestic currency closed at Rs261.50 against the US dollar in the interbank market on February 28, 2023. It closed at Rs267.88/$ on January 31, 2023, according to the central bank data. The government reinstalled the free-market exchange-rate mechanism on the recommendation of the International Monetary Fund (IMF) to win back its stalled loan program of $6.5 billion and let the rupee find its fair value. The domestic currency, however, failed to sustain at a fair value and got significantly undervalued in the wake of an acute shortage of US dollars in the economy. The historically weak local currency created artificial inflation, but failed to raise the country’s export earnings amid the economic slowdown in the country and export markets in the West.
Tax incentives needed
Pakistan’s women entrepreneurs have unanimously called for a separate entrepreneurship policy for women in the country. The demand came up at an online consultative session arranged by SMEDA, and was attended by female entrepreneurs from across the country.
The entrepreneurs complained that women have no special tax incentives and that they bear a burden of over 45 percent in taxes.
To help increase women’s participation in the economy they suggested female-led start-ups be provided with a tax holiday up to five years, coupled with a tax credit mechanism to ensure sustainability. Unanimously agreeing that the goal of women empowerment cannot be achieved without incentives and facilities, they demanded an exclusive entrepreneurship strategy and urged SMEDA to support their vision.
HBFC barred from risky commercial loans
The Privatisation Commission (PC) board on Tuesday barred the management of House Building Finance Company (HBFC) from taking expensive but risky commercial loans for their re-lending and investment in government debt, and picked two parties for privatisation of the entity. The PC board met under the chairmanship of Abid Hussain Bhayo, PC Chairman, and considered the privatisation of HBFC, an entity that had been on the active privatisation list for the past five years with little progress. At a time when the PC was putting in all its energies to sell the company, the HBFC management tried to borrow more to finance new mortgage loans, finance investment in government securities and finance the development of land blocks on its balance sheet. The expensive loans at around 23 percent interest rate would have eroded the chances of privatising the entity.
Fuel subsidy plan by government
The International Monetary Fund (IMF) was not consulted on the government’s recent move to announce a fuel subsidy, the lender’s key official in Islamabad has said, adding that it was seeking “greater details” on the scheme, Bloomberg reported. The statement from Esther Perez Ruiz, the IMF’s resident representative for Pakistan, came two days after the government unveiled a Rs 50 subsidy on each litre of petrol for low-income people. A day later, the government doubled the subsidy to Rs 100, which could be availed by the owners of motorbikes and cars of up to 800cc.