New Delhi, Feb 3 (NationPress) The Pakistan Business Forum (PBF) has evaluated the cost of conducting business in the nation to be approximately 34% higher than in similar regional economies. This has resulted in Pakistani exporters losing their price competitiveness in global markets, a critical factor for survival, as noted in a report from the Pakistani media.

In a bid to transition towards growth driven by exports, employment, and foreign exchange, this disadvantage is simply untenable. The repercussions for Pakistan’s exporters are already evident. Despite a rebound in global trade across various sectors, exports have stagnated since 2022, as highlighted by the Karachi-based Business Recorder.

The article emphasizes that regional rivals like India, Bangladesh, and Vietnam have increased their market share by maintaining lower cost structures, stable policy frameworks, and predictable operational environments. In contrast, Pakistan has allowed costs to escalate through policy decisions that severely undermine industrial competitiveness.

One of the most detrimental factors is energy pricing. Industrial electricity and gas tariffs are significantly above regional benchmarks. These elevated costs stem from inefficiencies, misguided subsidies, and the ongoing treatment of productive sectors as a means for fiscal extraction rather than fostering economic growth. For firms focused on exports, energy costs directly impact unit expenses, diminishing profit margins and making them less competitive in bids. Buyers do not wait for policy adjustments; they redirect orders to other countries, as lamented in the report.

The taxation policy has further exacerbated the situation. The responsibility of revenue collection disproportionately burdens a small segment of documented businesses. Instead of broadening the tax base and eliminating distortions, the policy has leaned on higher effective rates, withholding mechanisms, and indirect taxes that inflate costs throughout the supply chain. This strategy penalizes formal production and undermines competitiveness while failing to address structural leakages, as pointed out in the article.

This policy failure is glaringly evident in the cotton sector. Cotton is the backbone of Pakistan’s textile industry, which is the largest exporter and a vital source of rural income. However, over 400 cotton ginning factories have shut down, disrupting the entire value chain, according to the report.

As a result, farmers are facing diminished demand and lower profits, ginners have been forced out of business, and textile manufacturers are increasingly dependent on imported cotton, further straining foreign exchange reserves. This scenario is unsustainable, and all relevant authorities are aware of it. Yet, despite all the discussions, there remains a lack of concrete action on the ground to provide any hope, the article concluded.