2 ALL CHAMBERS PRESIDENTS CONFERENCE BHURBHAN

ND

MARCH 2010

SUMMARY
In March 2010, through CIPEs financial and technical assistance, 20 leading chambers from across Pakistan including representation from Federation of Pakistan Chambers of Commerce & Industry (FPCCI) spent two days at a conference to discuss economic challenges faced by Pakistani businesses, and business readiness to meet the challenges of economic recovery. CIPEs work in Pakistan mainly focuses on building the capacity of these democratic institutions so that they can become an effective voice for business community at large. In a two days conference the 20 chamber leadership discussed and deliberated their key agenda for economic recovery. A declaration was released at press conference. Salient points of the declaration include: y y y y y y y y y y y y y y y y y y Raise unified voice of business community in the larger interest Commercial Consular from Commerce Trade Group be appointed Budget should only be formulated through consensus from business community Effective and mandatory Private Sector representation in all government authorities/board/committees related to business. Export refinance rate to be equal to LIBOR Incentives for expatriate Pakistanis to increase foreign exchange remittances to reduce dependence on foreign borrowings Reduce non-development expenditures via improved governance mechanism. Effective energy conservation / management based on relevant international standards Energy projects based on comparative advantage. Recognize and encourage women leadership in policy development. Establish and promote technical institutions for youth in all districts. All transit trade agreements should be prepared in consultation with chambers. Parallel trade / smuggling should be plugged by all concerned agencies. Good governance and institutional building be installed at all levels. Water management strategy should be prepared on a priority basis. Inter provincial harmony and elimination of disparity at all cost. Chamber will ensure implementation of Clean Development Mechanism (CDM) The business community of Pakistan should immediately help the flood affected of Attabad and Hunza Nagar in Gilgit Baltistan where more than 50,000 people are facing acute shortage of water and other commodities.

Following the conference the business community continued to pursue the declaration and come across with the following key impact assessments:

Impact Assessment:
Raise unified voice of business community in the larger interest

Immediately after the conference, FBR Chairman came in to the limelight and consulted business community for obtaining their viewpoint on RGST or VAT. During the consultative process on the VAT, the FBR had detailed discussion with 20-21 chambers and trade bodies on the very next day of the Bhurban declaration. It was the very first action which the Bhurban declaration took place and without any doubt FBR had to delay this till October 2010 due to the persistent demand of all chamber which has still not untapped. Bhurban declaration stated that in the coming year uniform voice in the larger interest of business community will be raised at every possible level. In this regards, the burning issue of VAT/RGST Chambers pressurized parliamentarians. Chamber Presidents demanded that by this initiative it will further decline country export performance; the alternate way of raising collection included curtailing smuggling through the ATTA and imposition of tax on all categories of tax payers. The success of this Raise of Uniform Voice made a development that RGST is unlikely to be imposed in this financial year upon the Sheikh Hafez admit that implementing new tax structure is complicated (22nd December, 2010, express tribune)

All Punjab Chamber & Associations meet to discuss the gas crises on October 30,2010 at LCCI. Expressing the deep concern regarding the current gas crises, they have come out with the following key conclusions; that a policy should be drafted like the already implemented policy for IPPs. The strategy for minimization of the usage of domestic gas geezers should be considered as they can save 300 to 500 mmcd of gas. They also emphasized that the matter must be taken up during the meeting of Council of Common Interest to find the solutions.

All transit trade agreements should be prepared in consultation with chambers y Pak-Afghan Transit Trade Agreement has signed with due consensus of the Chambers and policy institutes.

Commercial Consular from Commerce Trade Group be appointed It was proposed in 2nd Chambers president conference, 2010 that Commercial Counselors should be appointed from Commerce Trade Group. Although it has not been implemented but correspondence has been initiated at different levels.

Budget should only be formulated through consensus from business community

For the first time major chamber submitted a joint budget proposal to Ministry of Commerce.

Incentives for expatriate Pakistanis to increase foreign exchange remittances to reduce dependence on foreign borrowings y Report published by Ismail Daar (December, 2010) suggest that foreign remittance over has shown a considerable growth of 15.54% and raised up to 4.43 billion us dollar during the first half of the current fiscal year. An increase of 595.72 million $ is seen as compared to the corresponding period of the last fiscal year. Government has expedited the process of reforms and policy amendment for the improvement in the systematic flow of remittance and for the benefit of expatriates. With the collaboration of ministry of oversea Pakistani and ministry of finance, the state bank of Pakistan has started a PRI initiative. This initiative is encouraging bank in Pakistan to enhance their outreach worldwide through new remittance, including incentives for remitter and beneficiary, and improvement in payment system infrastructure and Incentives for overseas entities (South Asia Online, November 2010)

Water management strategy should be prepared on a priority basis y The World Bank approved a credit worth US $ 146 million for the second phase of the Pakistan Barrages Improvement project to rehabilitate and modernize the Jinnah Barrage, and to improve irrigation and water management.

Parallel trade / smuggling should be plugged by all concerned agencies y To reduce smuggling across Afghanistan-Pakistan Borders, Cabinet approved the Afghan Transit Trade Agreement and the Prime Minister directs Federal Board of Revenue, Trade Ministry to work to curtail menace of smuggling. The value of total smuggled goods in to Pakistan stands between $4 to $5 billion. Additionally, 70 to 75 percent of the revenue losses to the country have been due to those items that were exported to Afghanistan under ATT.

Inter provincial harmony and elimination of disparity at all cost y In 2010 National Finance Commission Award, it was focused on eliminating the disparity and allocating funds not only on population basis but other factors such as inverse population density and poverty have also been kept in mind; in order to bring harmony in all provinces.

Water management strategy should be prepared on a priority basis y Unilateral, Bilateral and Multilateral Clean development projects have been started in the Energy, Transportation and waste management sectors.

Reduce non-development expenditures via improved governance mechanism. y In budget 2010-11 all non development expenditures were frozen that would result in saving of 4.701 billion in ongoing fiscal year 2010-11

Effective energy conservation / management based on relevant international standards y Under the Energy Management System adopted by 16 industrial units to develop inhouse capacity for attaining energy efficiency, measure taken have so far saved energy amounting to Rs. 128 million at a cost of Rs. 16.52 million. These includes industrial unit from steel, textile, fiber craft industries and chemical industry.

Energy projects based on comparative advantage y Pakistan energy requirement are increasing every year and to meet the rising demand of energy, the government of Pakistan is currently focused on diversification of gas supplies, reconstruction of hydropower plants, construction of underground gas storage facilities, development of oil exploration & production, tapping of renewable energy resources and attracting foreign investment. To overcome the severe power shortfall, the government plans to add 2495MW (1277 MW IPPs and 1218 MW RPPs) power to the national grid by December 2010

Recognize and encourage women leadership in policy development. y Ministry of Commerce granted license to three other chamber this year i.e Khyber Pakhtonkha, Mardan & Quetta which resulted in having the chambers in all four provinces of Pakistan. It was the challenging task for the women of these areas to bring them in to the main stream business activities, but through the continued efforts of the leadership of this region, they were able to get the license. A total of 8 chambers have been registered with collective membership of around 3000.