KARACHI Federal Minister for Commerce, Jam Kamal Khan has pledged the ministry’s full support in addressing the pressing issues impacting the business community during a meeting with Pakistan Business Forum (PBF).
The meeting highlighted several critical challenges, including Pakistan’s disproportionately high electricity costs, which are hampering the country’s ability to compete internationally, PBF said.
According to PBF, during the meeting, the representatives of PBF stated that Pakistan’s electricity costs, at 20 cents per unit, far exceed those of regional competitors such as India and Bangladesh, where costs are around 4 cents per unit.
The minister acknowledged that the high electricity tariffs have severely hindered the competitiveness of Pakistani industries in the global market, thereby stifling export growth.
“We can’t compete with the international market and can’t increase exports unless we address the issues related to cost of production,” he emphasized.
PBF President Khawaja Mehboob ur Rehman said for decades, Pakistan’s inward-looking trade policy regime has constrained economic growth and export performance.
High tariffs, pervasive import bans, complex regulatory duties and extensive red-tape have led to serious distortions in the economy.
These policies might have served a purpose in the past, but are now fundamentally misaligned with Pakistan’s development needs and changing global economy.
There is an urgent need for comprehensive reform to liberalize trade, boost competitiveness and enable export-led growth.
He said Pakistan’s trade policy approach has historically centred on import substitution industrialisation and protecting the domestic industry through high tariffs and non-tariff barriers.
This was rooted in a view that imports were ‘bad’ and threatened domestic production and employment.
Several factors contributed to the failed promise of import substitution industrialisation beyond the 1960s. First, the negative impacts of prolonged protection – lack of competition, weak incentives for innovation and low productivity became more apparent over time.
Copyright Business Recorder, 2024