KARACHI - All Pakistan Textile Mills Association (APTMA) Chairman Muhammad Yasin Siddik has said the cost of doing business in Pakistan is increasing day by day and reaches to an alarming stage making country’s products uncompetitive in the international market. Electricity and gas tariffs and discount rate in Pakistan is much higher than its competitors in the region, he added.

In a statement he said that an important component of total business costs is the cost related to the socio-economic environment in which the business operates.

Due to inefficient and unfriendly socio-economic environment, the cost of operating a business in Pakistan is considerably high. Consequently, Pakistani businesses are at a comparative disadvantage in respect of operating costs as compared to their competitors in the region.  He urged the government to make cost of doing business of the export oriented industry compatible with the regional competitors like, India, Bangladesh, Vietnam and Sri-Lanka.

The main factors of high cost of business in Pakistan are raw material, utilities, cost of finance, human resource, technology, infrastructure and supporting institutions. The cost competitiveness of business units in Pakistan is comparatively weak and there are no significant positive signs of improvement over the years, he added. He further said that discount rate in Pakistan is 10pc, whereas it is 7.75pc in Bangladesh, 8pc in Sri-Lanka and 9pc in India and Vietnam. Similarly per unit electricity tariff in Pakistan is $0.17, $0.13 in India, $0.09 in Bangladesh and Sri-Lanka and $0.073 in Vietnam. As of today, labour wages per hour in Pakistan is $0.51, $0.20 in Bangladesh, $0.22 in Sri-Lanka and $0.30 in Vietnam, he added.

The logistics and transportation cost of commodities exported from Pakistan is as high as 15pc of the commodity cost against 8pc in the developed countries. To keep Pakistani products competitive it is essential to streamline the operating procedures so that delays and associated costs are minimised and timely deliveries are insured, he added. Yasin said to make the country’s export compatible with their competitors in the region the government has to take some very important decisions to give a boost to the industrial sector to reap the benefit of GSP+ facility provided by the European Union to Pakistan by allowing its hundreds of items duty free access in the 27 countries.  It is good chances for Pakistan to increase exports and get maximum benefits otherwise we will loose the golden opportunity and survival of the industry will remain in doldrums.