Daily Times

KARACHI: With the commencement of commercial activities from Gwadar Port under the China Pakistan Economic Corridor (CPEC), more than fifty years old dream has been translated into reality, said veteran politician, businessman and Federation of Pakistan Chambers of Commerce and Industry’s Pakistan-UAE Business Council Chairman Dr Mirza Ikhtiar Baig, urging all political parties to keep the project of national interest away from politics.

“CPEC is a national project of international importance. I would request all the political parties to refrain from making it a provincial subject and do not drag it into controversies,” he stressed, adding that Iran, Russia and CIS countries are eager to be on board in this project to reap benefit and logistic cost. With the start of the business activities, there would be massive development during next couple of years, he opined.

Dr Baig said the initiation of CPEC projects has opened up new era of economic, political and diplomatic relations not only between Pakistan and China, but also with the whole world. “To me, CPEC is a beautiful example and role model of regional connectivity,” he added during an interview with Daily Times.

He dispelled the impression that there was nothing or little for the local companies in CPEC. “Pakistani companies will also benefit from the execution of the project. Due to principle changes in ECR Credit Scheme, Pakistan’s steel and cement industry will benefit as Chinese will only bring skilled manpower and monitoring staff,” Baig noted, adding that initially, under ECR Credit Scheme for any project, the landing country was entitled to bring duty free machinery and workers.

“The corridor is a win-win for both countries. Through this mega project, Pakistan will become the hub of business and trade in Asia, and Western China will penetrate into Asian and European markets. It will cater to the needs of all federating units of Pakistan through proper rail and road network and multiple projects on energy within the next three years,” the FPCCI office bearer said.

In response to a question about bilateral trade between Pakistan and UAE, the Pakistan-UAE Business Council chairman said that UAE was once the biggest investment destination for Pakistani investors who so far have invested around $25 billion in Dubai’s real estate sector as compared to UAE’s investment in Pakistan, which has come down to only $21 billion from $45 billion. “There are around 400,000 Pakistanis expatriates in UAE who play important role in the development of the country. Trade between UAE and Pakistan hovers around $9 billion, comprising $3 billion exports and $6 billion imports,” he informed.

Replying to another query on local property market, he expected that the property prices would boost in the near future as the government was planning to announce amnesty scheme for real estate sector, which would provide way out to regularize real estate sector. “The government was planning to impose 3 percent flat tax on the sale-purchase transactions,” he claimed.

Dr Baig attributed the declining exports to the rising cost of inputs. He said the production cost including wages, energy cost, direct and indirect taxes to the tune of 4-5 percent have made our exports uncompetitive with our regional competitors. “When the world is engaged in zero-rated exports, we are charging numerous taxes such as withholding tax, and export development surcharge. At least Rs 300 billion of exporters are stuck with the government for last three years out of which the government has paid Rs 20 billion and Rs 26 billion so far but still a huge amount remains stuck,” he added.

He noted that due to the stuck up amount, the exporters were facing liquidity crunch. “Cash flow of companies was forcing them to either borrow from banks, which increases their cost or shrinks their industrial activities. Apart from domestic issues the international market was also passing through a recessionary period which was also hurting exports,” he noted.