Pakistan’s export-oriented businesses are unlikely to withstand the withdrawal of subsidized electricity, limited imports, all-time high-interest rates, and the rupee’s depreciation against the US dollar.
President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Irfan Iqbal Sheikh stated that the private sector in Pakistan is under pressure and investments have consistently dried up.
He noted that businesses have lost confidence in the government and sought more information on what steps would be taken to stabilize the economy following the resumption of the IMF program, and how and when the government would gain the confidence of the business community. The FPCCI executive added that increasing the revenue collection target to Rs. 8,709 billion on IMF orders would further tax the already taxed people, badly impact businessmen’s profitability, and decrease employment opportunities.
On the other hand, Businessmen Group (BMG) chairman Zubair Motiwala and SITE Association of Industry president Riaz Uddin condemned the government at a very large gathering of affected SMEs for withdrawing the subsidized electricity tariff of Rs. 19.99 from March 1 for export-oriented sectors in to woo the IMF. They further contended that the government’s action is harmful to exporters because the majority of the affected SMEs are indirect exporters who are intricately linked to the entire supply chain of exporting industries.
Motiwala went on to say that in such difficult times when the country desperately needs foreign exchange, these moves would further afflict the local exporting industries, resulting in a further drop in exports, which stood at $32 billion in 2021-22 and are expected to fall to $27-$28 billion in FY23.
More than 150 factory owners representing over 100,000 workers unanimously demanded the resumption of the Regionally Competitive Energy Tariff (RCET) in accordance with the earlier decision of the Economic Coordination Committee (ECC) in October 2022.
SITE President Riaz Uddin said that the next steps would be decided after Eid-ul-Fitr.
