Interactive Session with Syed Shabbar Zaidi at SCCI | Economy, Taxation & Export Challenges

Syed Shabbar Zaidi delivered a detailed analysis of Pakistan’s economic challenges and regional competitiveness, comparing the country with India, Bangladesh, Vietnam, China, Turkey, and Malaysia. He observed that over the past twenty-five years Pakistan had significantly fallen behind regional economies in exports, industrial growth, taxation, and economic stability. Highlighting currency depreciation, he noted that the Pakistani Rupee had weakened from around PKR 56 per US Dollar in 2000 to nearly PKR 284, while India’s currency remained below 100 per Dollar. He further pointed out that Vietnam’s exports had increased from nearly the same level as Pakistan’s in the 1990s to approximately USD 600 billion, whereas Pakistan’s exports remained around USD 32–35 billion. Similarly, he noted that India’s IT exports had surpassed USD 100 billion compared to Pakistan’s estimated USD 2 billion. Discussing demographic and structural issues, Mr. Zaidi stated that Pakistan’s population had risen from approximately 14–15 crore to nearly 25 crore, while maintaining one of the world’s highest population growth rates. He highlighted that Pakistan’s tax-to-GDP ratio remained around 10 percent compared to India’s 17 percent, and expressed concern over nearly 30 million out-of-school children across the country. He criticized Pakistan’s Free Trade Agreements, particularly with China and Malaysia, stating that they had adversely affected domestic manufacturing. According to him, Chinese industrial dominance, subsidized financing, and lower production costs had weakened Pakistan’s industrial competitiveness. He also noted that industrial electricity tariffs in Pakistan were almost double those of India in Dollar terms, while petroleum levies further increased manufacturing costs. Addressing external sector challenges, he stated that Pakistan had accumulated an external financing gap of nearly USD 400 billion since independence and continued to face an annual deficit of USD 8–12 billion, alongside external debt liabilities of approximately USD 140 billion. He warned that remittances had now exceeded exports and emphasized that any disruption in remittance inflows could destabilize the economy. Mr. Zaidi strongly criticized excessive taxation, overregulation, and the prevailing compliance framework, stating that they discouraged documented manufacturing activity and promoted undocumented trade and speculative sectors. Referring to the proposed FBR revenue target of nearly PKR 17 trillion, he observed that after provincial transfers and debt servicing, the federal fiscal position remained under severe pressure. He also highlighted the large undocumented economy reflected in nearly PKR 10 trillion circulating in cash. Emphasizing the need for reform, he urged Pakistan to adopt a genuinely export-led growth strategy centered on value-added manufacturing, industrial competitiveness, IT services, and women’s workforce participation. Referring to Bangladesh’s textile model, he highlighted how female participation had significantly contributed to export growth. He also stressed the importance of expanding Pakistan’s IT sector through dedicated IT parks, technology zones, and export facilitation infrastructure. He advocated reducing government interference and simplifying taxation and regulatory procedures to encourage industrial expansion and formal economic activity. He further advised businesses to capitalize on changing global trade dynamics, particularly US-China tariff tensions, by attracting Chinese manufacturers to establish production facilities in Pakistan and by exploring emerging regional trade corridors connecting the Gulf region, Iraq, Turkey, and Europe. Mr. Zaidi also encouraged exporters to better utilize Export Processing Zones (EPZs) for international business expansion and foreign exchange flexibility, enabling Pakistani companies to establish overseas operations more effectively. While specifically referring to Sialkot, he praised the entrepreneurial spirit of its business community and appreciated the successful operation of Sialkot International Airport, describing it as a model of private-sector capability in logistics and aviation. Concluding his address, he proposed the establishment of a special economic and financial enclave in Pakistan inspired by international financial centres such as DIFC. He explained that such a zone, operating under a facilitative and predictable regulatory framework with simplified taxation and streamlined approvals, could attract international investment, multinational businesses, and financial services, ultimately positioning Pakistan as a regional economic gateway. #SCCI #SyedShabbarZaidi #Sialkot #PakistanEconomy #Taxation #Exports #BusinessCommunity #EconomicSession #Industrialists #Exporters #FiscalPolicy