The cost of doing business in Pakistan is around 34 percent higher than in regional economies, creating a serious competitiveness crisis for local industry, the Pakistan Business Forum warned on Thursday.
The forum said that excessive operating costs have sharply weakened the ability of Pakistani industries to compete internationally, even as global trade has shown signs of recovery in several sectors since 2022.
In a statement, PBF said irrational taxation, high electricity and gas prices, and currency instability have pushed exporters out of competition with regional economies such as Bangladesh, India, and Vietnam. As a result, Pakistan’s exports have remained largely stagnant.
PBF Chairman Ahmad Jawad said businesses in Pakistan are struggling to survive, let alone expand exports, because their cost structures are far higher than those of regional competitors.
He stressed that urgent reforms are needed, including rationalization of the tax system, reduction in industrial energy tariffs, and a clear policy to stabilise the rupee.
According to Ahmad Jawad, the rupee should be stabilised at Rs. 240 per dollar to bring predictability to the economy. He said a stronger and stable exchange rate would help control inflation, reduce the cost of imported raw materials, and restore confidence in export orders.
He noted that continuous devaluation has failed to boost exports and instead fuelled inflation, raised production costs, and damaged business sentiment. Over the last six years, the rupee has depreciated by nearly Rs. 160 against the dollar, a trend he described as a result of weak economic management rather than market fundamentals.
The PBF also pointed out that although the rupee is currently holding its ground, the dollar rate remains excessively high when viewed against the country’s foreign exchange reserves. Artificial devaluation, the forum said, has benefited speculative elements while harming productive sectors.
Highlighting problems in the cotton sector, PBF South and Central Punjab Chairman Malik Talat Suhail expressed concern over the closure of more than 400 cotton ginning factories, which have disrupted the entire cotton value chain and hurt farmers, ginners, and the textile industry.
He said the imposition of 18 percent GST on local cottonseed and oil cake has increased costs, reduced demand for local cotton, and caused financial losses for farmers. He added that cotton remains a major component of Pakistan’s import bill.
Malik Talat Suhail urged the government to withdraw the 18 percent GST on cottonseed and oil cake, saying this step would encourage cotton cultivation in Punjab and Sindh, reduce import dependence, and revive the domestic cotton economy.
He called for an SRO to be issued by February, as early cotton harvesting begins by the end of next month. Without timely intervention, he warned, Pakistan risks further decline in cotton production, continued factory closures, and increased pressure on foreign exchange reserves.
The PBF cautioned that failure to implement urgent structural reforms could lead to long-term deindustrialisation, loss of export markets, rising unemployment, and deeper economic instability. It urged the federal government to engage with stakeholders and adopt pro-business, pro-export, and pro-farmer policies to restore competitiveness and put the economy back on a sustainable growth path.
It is a real agenda of form 47 govt, middle and lower class of business should run away from country.