The Pakistan Business Council (PBC) has warned that premature deindustrialization has hurt Pakistan’s economy by causing unemployment and a decrease in its share of world exports.
In a detailed letter to the government, the PBC said factors like high taxes, unrealistic exchange rates, unfavorable import tariffs, and ineffective trade agreements power outages, and expensive energy costs had caused manufacturing to decline.
The Council said Pakistan’s industrial sector faces high power and gas tariffs compared to neighboring countries like India, Bangladesh, and Vietnam. These high costs make it difficult for Pakistani exports, especially textiles, to compete globally and for domestic industries to offer competitive prices compared to imports.
The council emphasized that tariff hikes burden industries and discourage investment. Instead, reforms are needed, and the government should engage the International Monetary Fund to pursue these reforms.
Furthermore, the PBC stressed the importance of providing competitive energy tariffs to industries to boost demand and support economic growth. It also urged the government to broaden the tax base while ensuring fairness and discouraging double taxation, which currently hampers business growth and investment.
PBC called for a shift in approach away from reliance on tariff hikes and towards comprehensive reforms to address Pakistan’s economic challenges effectively.
