Former caretaker federal minister for commerce and textile industry Dr Gohar Ejaz has said that the only sustainable solution to Pakistan’s economic problems is to restore the competitiveness of the industry as compared to the neighboring countries.
Taking to his social media account on X, Gohar Ejaz said that Pakistan’s interest rates, energy costs, and taxation levels were all almost double than those of neighboring countries.
The textile icon and entrepreneur said that over the last 36 months, the government tried to stabilize the economy but achieved less than 2 percent aggregate growth.
During the same period, the exchange rate has deteriorated from Rs 160 to 280 per dollar, and exports have remained stuck at around USD 30 billion which clearly shows devaluation was not the solution to make Exports Competitive.
Gohar Ejaz said Pakistan’s interest rates were twice as high as those in regional economies. China and India both maintain policy rates below 5 percent with real interest rates under 1 percent.
He added that in contrast, Pakistan’s Monetary Policy Committee has kept the policy rate at 11 percent since the beginning of the year—reducing it by only one percentage point in the last 12 months—resulting in average real interest rates above 6 percent.
This is eroding industrial competitiveness, suppressing growth, and keeping the economy on a ventilator with no export expansion.
While suggesting the way forward, Gohar Ejaz said that the government can make Pakistan’s industry competitive by reducing energy to 9 cents taxation to maximum slab of 20 percent, interest rates to around 6 percent and bringing real interest rates down to 1 percent in line with regional benchmarks, over the next six months.
The textile sector icon said this will also reduce government debt servicing by Rs 3 trillion per year.