KARACHI: Cautiously welcoming the formation of the Economic Advisory Council (EAC), the business leaders on Friday said the body had been formed without taking any input from the businesses and a common “Charter of Economy” was missing in the terms of reference (TOR).
President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Irfan Iqbal Sheikh, has said that the EAC under the leadership of Prime Minister Shahbaz Sharif has been formed without consulting the business community.
While expressing shock, he said, “We have also not given representation in the council and it is counterproductive to say the least,” he said in a press release.
He said the FPCCI is the apex chamber of the country and its representation would provide able and timely assistance to the prime minister and his economic team in the matters of budget-making, taxation and tariffs, governance and administrative reforms, rapid industrialisation, textiles and allied industries, promotion of information and communication technologies, EPZs and SEZs, export growth and import substitution, rupee-dollar parity and SMEs.
He noted with concern that the current account deficit (CAD) would be close to $20 billion, which is well above five per cent of GDP, while inflation has crossed 12pc and heading towards 15pc by the year end. The trade deficit has crossed $35bn in 9MFY22, while KIBOR is 14.10pc after 13 years and 6-month treasury bills at 14.99pc after 22 years. Interestingly, this is happening in spite of record proceeds from exports, remittances, and taxes, he added.
The FPCCI chief reiterated his stance that policies should not be announced in a vacuum without consulting the business, industry and trade community, as they are the real stakeholders in the economy.
The Pakistan Business Council (PBC), while welcoming the establishment of the EAC, noticed that the development of a common Charter of Economy is missing in terms of the council’s TOR.
PBC CEO Ehsan A Malik stated that fundamental economic reforms cannot be implemented without cross-party agreement. Also, without a sound economy, public welfare objectives cannot be achieved, he added.
In a letter to PM Sharif, he said another critical aspect of the economy which is not explicitly covered in the TOR is agronomy. Agriculture output is critical for food security, and it also has a significant impact on the current account and inflation, so this sector should be represented in the EAC.
The EAC does not have any representation from the IT/IT-enabled services, start-ups, or telecommunications sectors.
Despite the major challenge of growing exports, the TOR does not explicitly cover exports. Nor does the EAC include the ministers of commerce or industries. Malik said that the inclusion of commerce and industries ministers would be useful in the analysis of the cost and benefit of import protection.
Through the EAC, the government would also have an opportunity to begin some of the fundamental reforms in energy, broadening the tax base, addressing state-owned enterprise losses and privatisation, improving public debt management, and dealing with the growing pension liability, he said.
He urged the Prime Minister to also consider reforms of the National Accountability Bureau law to address the paralysis in decision-making.