‘Ignoring FPCCI will create problems’

An interview with Engr Daroo Khan Achakzai, President FPCCI:

Engr. Daroo Khan Achakzai is no stranger to chamber politics. As the Chief Executive of Daroo Khan and Brother’s Trading Company, Chaman, he has been the vice president of the FPCCI twice before and has held similar position at Pakistan Afghan Joint Chamber of Commerce & Industry. He is also the member of Afghanistan-Pakistan Transit Trade Coordination Authority constituted by Commerce Ministry, a life time member of Saarc Chamber of Commerce and Industry and has served as a director on the board of Pakistan Steel Mill.

In this short interview with BR Research, Mr. Achakzai shares his views on the state of economy, his plans for beefing up the research wing of the FPCCI and what seems to be a veiled threat to the government if it fails to take the FPCCI on board while ‘continuing to give an over represented space to the Pakistan Business Council’.

BR Research: What is your pulse reading of the economy at present especially your thoughts in so far as the decision to go or not to go with the IMF is concerned?

Daroo Khan Achakzai: We don’t think that Pakistan has any other alternative but to go to the IMF. We believe that the government will eventually take the programme. The question is what kind of conditions the IMF will place on us, and that’s what we believe the government is working towards, to try ensuring that Pakistan gets as much soft conditions as possible, whereas the IMF seems to be bent on adding strict conditions to the loan.

But while we do support the government’s efforts to try softening IMF conditions, and we think it will be the government’s weakness if they are unable to ease the conditions, we also think that unnecessary delay in going to the IMF ought to be avoided since the delay is causing a lot of uncertainty to business decision making. As a result of this uncertainty, local and foreign investors are adopting a wait and see strategy, which is also causing economic slowdown.

BRR: The big-ticket corporates seem to have direct access to economic power corridors these days thanks to the clout of Pakistan Business Council. How is the FPCCI reacting to it; compete, cooperate, fight, flight…. what is going to be your strategy?

DKA: We believe the FPCCI is the apex body that represents the whole of service sector, SMEs, as well as corporate sector across Pakistan. These big corporates that are the parts of the PBC are also are part of the FPCCI indirectly through the chambers and associations they are a member of. There is no substitute for us, nor there should be one.

The PBC is a club of few big capitalists and they have no doubt done good some research work. To give them representation of the whole of the country’s business sector because they have done some research work is uncalled for. The PBC does not represent the export sector, the SMEs, or the services sector across the country, and yet they are over represented in the Council of Business Leaders and other economic corridors, and in the delegations accompanying prime minister or foreign minister abroad. By giving PBC members an overrepresentation while sidelining the FPCCI, the government is creating difficulties for itself.

For instance, the Prime Minister went to Turkey and addressed the Turkey’s counterpart to the FPCCI, which already has an MoU with us on several fronts, whereas the PBC cannot and should not have state-facilitated collaboration with foreign business federations, simply because they do not represent the country wide business community. Therefore, it will be better for the government to take the FPCCI on board. We also want the government to complete its tenure and that it is able to serve the people and the business community at large.

BRR: Granted! But how is the FPCCI dealing with the situation at hand?

DKA: Let me make it clear that we are not in competition with the PBC. They cannot be our competitors since they hardly represent the scale and scope of businesses that we do across the country.

As regards dealing with the situation, when Finance Minister Asad Umar visited the Federation, the first thing I presented to him in my opening speech that while we appreciate your visit to Turkey, it would have been better if the FPCCI was not side lined from the trip. And in response to that, he acknowledged that going forward the FPCCI should be represented at every forum.

BRR: Are the interests of the FPCCI and the PBC aligned with each other or at odds with each other? What are the common grounds or what are the differences?

DKA: This is a difficult question to answer in detail at the moment. But suffice to say that our interests cannot be aligned. The FPCCI takes care of the interests of the very small businessman who probably takes home probably no more than Rs50,000 to Rs100,000 a month, and also of bigger corporations that in taxation parlance are called the large taxpayer units (LTU). The fact I being the president of FPCCI come from the SME sector, and that many of our vice presidents do not fall in the LTU speaks volumes about the fact that we don’t only represent elite interests. In contrast, the PBC is only an elite club.

We are the true bridge between the public and private sector. Whatever are the real or practical issues faced by the government, we present them to our member bodies and make them understand to convince them to accommodate the needs of the government. Likewise, we also channel the issues faced by the business community across the country to various tiers of the government.

BRR: FPCCI’s research and research by chambers and associations in Pakistan at large has been rather weak. What improvements are you bringing about in that aspect?

DKA: I wouldn’t use the word weak, because research is an area where there is always room for improvement. Second, it is not as if the FPCCI doesn’t conduct research; its just that its dissemination to the media and the wider public at large needs to be improved.

However, in recent years the FPCCI has signed an MoU with about 21 Pakistani universities in order to improve our research even more. We are just about to sign another with Bahria University, and you will soon see significant developments going forward in so far as FPCCI’s research is concerned. To that end, we have also requested our current and former senior FPCCI leadership to oversee the research unit of FPCCI for which we are also in the process of hiring fresh staff.