More than 50% of Industrial Units Closed

Islamabad: Prominent figures in the business community have expressed serious alarm over the closure of more than half of the factories across every industrial zone nationwide. 

They caution that without urgent governmental action, this trend could spell disaster for the economy.

They urgently call for the elimination of the two-tier tax system, which imposes a heavy burden on the formal industrial sector, compelling industrialists to cease operations.

"Some industrialists appear to show increased production in regions like Azad Jammu and Kashmir and former tribal areas due to widespread misuse of tax exemptions, despite manufacturing elsewhere in the country. These loopholes must be addressed," stated an industrialist from Faisalabad, speaking anonymously.

There is a pressing need, they argue, for the government to establish consistent, long-term policies to support the private sector.

Majyd Aziz, former president of the Karachi Chamber of Commerce and Industry, highlights frequent advertisements in newspapers by various trade associations protesting government policies and announcing significant industrial closures.

Aziz questions the effectiveness of government efforts to attract foreign investment amidst domestic investor struggles, noting that more than 40% of weaving units in Karachi's SITE Association of Industry are inactive due to high electricity rates.

He points out that many struggling units are unable to compete with smuggled foreign products, further exacerbated by decreased consumer purchasing power due to inflation.

As factories close or reduce operations, layoffs and unemployment rise, contributing to a surge in street crimes. Aziz stresses the urgent need for effective law enforcement by both political and military authorities.

Muhammad Farooq Shaikhani, President of the Hyderabad Chamber of Small Traders and Small Industry, highlights severe energy crises, rising operational costs, and high interest rates as primary reasons for industrial closures. He calls for streamlined bureaucratic processes and criticizes inefficient contracts with independent power producers, which contribute to circular debt and increased production costs.

Shaikhani emphasizes the importance of policy continuity to attract and retain foreign investors in Pakistan, highlighting the challenges posed by inconsistent policies.