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Exigency to overhaul trade and energy plans

Exigency to overhaul trade and energy plans

Interview with Muhammad Farooq Afzal — President/CEO of ITN Group of Companies


Muhammad Farooq Afzal is a dynamic and a profound professional in the realm of textiles, information technology, business consultancy, tourism, and event management. He is pursuing his entrepreneurial ambitions for last 23 years, locally and internationally. He has been playing an instrumental role in promoting trade and business ties between Pakistan and other countries since 2004.

Farooq has been continuously putting in his multifaceted efforts towards the cause of promotion of bilateral and multilateral trade. Farooq has also been participating in TV talk shows regularly to speak about the economy, promotion of bilateral and multilateral trade based on the business opportunities lying in respective countries. Farooq holds a Master’s degree in Business Management from Philippines and Bachelor’s degree in Commerce from University of Sindh, Pakistan.

He is also a Doctor of Homeopathic Medicine. He is Founder President of Pakistan Turkiye Business Forum, President/CEO of ITN Group of Companies, which is involved in textiles, information technology, travel & tourism, event management and general trading. He is also a member Managing Committee of Karachi Chamber of Commerce & Industry.

PAGE: Could you give your perspective on trade balance of Pakistan?

Muhammad Farooq Afzal: Pakistan has been running consistent trade deficit since 2003 mainly due to high imports of petroleum products, natural gas liquefied and cooking oil. The other products are iron, steel & scraps, machinery & apparatus, pulses and several other articles needed to make finished products to export.

Pakistan’s main exports are of readymade garments, bed wear & towels, yarn & fabrics, rice, fruits & vegetables, surgical & medical instruments, sports goods, leather goods and information technology.

A country’s trade balance is defined by its net exports i.e. exports minus imports. It is also influenced by all the factors that affect international trade i.e. productivity, trade policy, exchange rates, foreign currency reserves, inflation, and demand.

Unfortunately, none of any political government has paid attention to reduce the trade balance. All efforts were made to make Pakistan an importing country to fulfill their personal agenda. We never had such conducive trade policies, which could have promoted exports and to rely less on imports. There are many articles; we import to make the finished products to export. We never made policies for the import substitution industries, which could help us to reduce our imports. Despite of knowing that more than 40 per cent foreign exchange is being drained because of the import of the petroleum products and cooking oil.

Our governments never encouraged for alternate energy sources i.e. wind, solar and nuclear nor made any efforts to build water dams to get cheapest energy.

We are the 8th largest milk producing country in the world and we could have used that milk to convert that into ghee or oil to replace palm oil, which would again save us foreign exchange.

We need to develop aggressive incentivised trade policies with all the honesty and sincerity to bring our imports down with the indigenous available resources and to increase our exports again through such policies that must encourage putting up more industries in above-mentioned products by providing a comprehensive required infrastructure. Otherwise, we will always be crying over the negative trade balance.

Pakistan’s 70 per cent economy is based on agriculture, and are blessed with all kind of fresh fruits and vegetables. We must pay special attention to increase our exports of fruits and vegetables. There is a need to establish special export economic tax free zones with comprehensive infrastructure, near to all those agricultural lands all over the country only for the fruit and vegetable processing industries. This will save us fuel cost and wastage of tonnes of fruits and vegetables.

We have 1,400KM costal line and export of fisheries is very important. We have been banned by many countries for the export of our seafood because of unhygienic conditions. We must develop such policies to allow the investors to import high tech machinery and expertise. We need to establish special export economic tax free zones near the costal line which would help us to increase our export of seafood. Pakistan’s economic stability and sustainability is entirely dependent on the increase of our exports through aggressive industrialisation in the respective potential exportable goods.

PAGE: What is your standpoint on exploring new export markets?

Muhammad Farooq Afzal: Unfortunately, our all governments and businessmen always focused on EU and USA. We never had a market blend strategy at any level. We got busy only on above markets and left the rest of the world for our international competitors. Our competitors are smarter than us and made their presence almost everywhere.

Let me give you example of Russian Federation, which has market size of $72 billion in textiles, $45 billion of all kind of food stuff including fruits and vegetables, $24 billion of pharma, $4.5 billion of sports goods, $2 billion of rice, $3.5 billion of leather goods and so on. Our total export to Russia is hardly $300 million in fruits and vegetables, all kind of textiles, sports goods and surgical goods etc. Does this number justifies? Not at all. I would say with responsibility that we have a potential of $10 billion per year to that market. What we have done for that? nothing!!!

Same goes to African Continent, there we have hardly $1.32 billion exports against the potential of more than $1 trillion? South America, we have less than $1 billion exports – ECO countries we have about $2.72 billion where more than $2 billion we do export to Afghanistan. Neither our exporter nor our government is interested to explore the new markets. We have great potential for the exports of our traditional products such as textiles, fruits and vegetables, sports goods, surgical and medical equipment, leather goods, pharma, rice and even information technology. For our presence, it is very important that we must participate in all kind of exhibitions in all respective potential countries to display our products and to establish contacts for the exports. TDAP can play a very vital role in this regard.

PAGE: What is your take on the government policies for the promotion of trade?

Muhammad Farooq Afzal: Our trade policies are being made by incompetent bureaucrats and approved by the incompetent politicians. They make such policies by cut paste from the computer and never do any research on it. They do not compare the policies of our international competitors and do not learn from their success stories.

Our incompetent policy makers even do not want to learn from the advanced economies of the world. All are working for the personal stakes and not for the country. Trade policies are announced in a press conference to gain the political goals but in my whole life, I have never seen any implementation nor a responsible committee for the same.

PAGE: How would you comment on the taxation policy?

Muhammad Farooq Afzal: I think that Pakistan is the only country where taxation department through its unjustified policies terrorizes not only the business community but an individual as well. There is again an unfortunate that our taxation department has been influenced by many cartels and they do not impose taxation on them. There is a great need of bring many into tax bracket but our taxation policies are only after the existing tax payers. Because of heavy taxation, businessmen and individuals evade the taxes by paying huge amount of bribe to the taxation department.

Taxation policies are not justified at all, we need honest, and sincere leadership and officials those can bring and introduce structural reforms of taxation department enabling them to make justifies taxation policies satisfying all tax payers.

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