President’s Address on inauguration of Sundar Industrial Estate



















Governor Punjab General Khalid Maqbool, Chief Minister Punjab Pervaiz Elahi, Federal Minister for Industries Jahangir Tareen, Chairman Industrial Estate Mr. Mannu, CEO Estate Sadiq Chohan, distinguished guests, ladies and gentlemen, Assalam-o-Alaikum. It is indeed a pleasure to be here at the inauguration of Sundar Industrial Estate. I am glad that this plan would take our economic strategies to the public. In that direction it is a proper step. Secondly, I am glad because this is a plan through which there would be a revolutionary coordination or cooperation between public and private sector. I remember when we planned of setting up an industrial estate, people had doubts but this is an example which should be emulated in other provinces of Pakistan. This is a step forward. The task of public sector is to facilitation and policy making. Let the private sector come up and perform like they have today. I was watching the aerial view and it looked very organized, the roads, drainage system, the electricity system and an ideal environment. I would like to appreciate Mr. Mannu that he presented the potential of private sector to the nation in a beautiful manner. This is an ideal reflection of cooperation between public and private sector. I am extremely pleased to be here and that the industry would be set up within the time frame of two years. I am also glad that in this Estate there is an affluent treatment plant with solid base management system. So it means that it is an environment friendly industrial park with modern facilities. If anyone comes from abroad and sees this they should know that we know how to organize and manage ourselves and we understand international standards or criteria and that is what will attract foreign investment and FDI. So therefore, the electricity system is underground. Ladies and gentlemen, for any plan or activity there is three tier approaches. First of all understand the environment and if there are any defects rectify or remove them. In this case, we have to create an investors friendly environment. The important considerations are: ?? All economic sectors are open for FDI in Pakistan ?? 100% foreign equity is allowed in Pakistan ?? Equal treatment to international and foreign investment

?? Remittances of royalty, technical and franchise fees, capital, profit, a dividend is allowed ?? Foreign investment is fully protected ?? 0-5% custom duty on import of machinery ?? No sales tax on import of machinery ?? No withholding tax on import of machinery Through this an investor’s friendly environment is created through which we can attract foreign and local investment. We have facilitated the local industry to set up industry and earn profit. The second tier is that the strategy should be clear. There should be cheap labour; qualified manpower so that the industry runs excellently. We have seen that there were defects in previous strategies in Pakistan; we were limited to textile and agriculture. This would not the way forward. Textile is only 6% trade in the world. 61% trade is in heavy industry. We are bogged down in 6%. If we have to increase our export, it can’t if we’re limited to textile. So we planned the first strategy that we have to move toward setting up new industries. We have to concentrate on SMEs so there is distribution of wealth to the middle-class. These SMEs are essential and I am happy that there are small plots so that small industry can also participate. So that is another part of the strategy. The third tier is the sense of direction. We should manufacture spare parts and export. Be it electronic or machinery. The spare part would be cheaper yet of quality. We should be the producers; the world should see investment opportunity for industry. If cars are manufactured in US, Japan or Europe, their parts should be manufactured in Pakistan and they should import them because we can produce better quality parts at cheaper costs. Then I would like to comment on agro-based industry. We have the potential in agro-based industry, live stock, and dairy. We are the fifth largest producer of milk products and I am glad that the biggest plant of Nestle’ is being set up in Kabirwala. We should enhance this. Our country is giving 1/10th of the milk that cow abroad in developed country produce. And we can increase the long-term production to 3-4 times increase within 2-3 years if we improve our strategy. There should be cheese, yogurt, butter exported from Pakistan to the world. Similarly, we have live stock in Balochistan and in Punjab Cholistan are live stock centers. This should be improved. We have to optimize this potential for the poverty elimination and our exports would increase. I would like to inform that the current dollar account of our exports we should be surplus in it and that can be when our income increase and that is through three sources: export, FDI and remittances.

Our current account rather dollar account should be surplus and it can be in surplus only when we have more revenue. Remittances have increased from $900 Million to $4.2 Billion and we will cross $5 Billion. FDI has increased from $300-$400 Million to $3.4 Billion and it should also cross $5 Billion. This is the way of progressing. Last thing is export which should increase by leaps & bounds. We are left far behind. All the South Eastern tigers were at Pakistan’s level in 1960s. Their export has been raised up to $400 Billion and we have a rise from $8 Million to $18 Million. Why there is such huge difference? Because our strategy is wrong, we have to correct this strategy. We have to reach at $100 Billion and it is achievable. We have the potential. The growth rate is 78% currently and we will maintain it. A country can not develop until and unless revenue generation is not good. I can say proudly that revenue was Rs. 300 Billion and now our target is Rs. 835 Billion and it will be Rs. 900 Billion by the end of this year and we will achieve the target of Rs. 1 Trillion next year. But this is not enough; we have to expand the tax base. We will not increase the tax but will expand the tax base. I want Rs. 2 Trillion. You people tell me the plan to achieve it; I am not satisfied with this increment of Rs. 100 or 200 Billion. I will appeal the whole nation, all traders and everybody involved in economy to pay tax whatever it is so that money may come in circulation. I want to tell you people that where we spent the money we got from this increased tax base. You should not pay tax if it has not been utilized. Our PSDP has been Rs. 80-90 Billion in past for whole decade of 1988-99, it just crossed once the figure of Rs. 100 Billion and this year PSDP allocation is Rs. 415 Billion. So if the tax revenue has been increased then it has been spent on developmental projects. So this is the way, taxes should be reduced and base should be broadened, it will increase revenue and resultantly the development will increase. I seek your help for implementing this strategy for the sake of Pakistan. Every one should pay tax. Gas and electricity are very necessary for development. We have many long term and mid term plans for increasing the production of electricity and we are doing it from every source other than oil, from CNG, LPG, Gas, Water, Nuclear, Coal and alternate source i.e. wind. We are doing all this. Whatever the investment can be done in these areas is welcomed. This investment in energy sector is important. We need gas for it. I want to say that the resources we have explored in Frontier will be used not only to provide gas to five districts of NWFP but also all the area between Nowshera and Islamabad. As it will come down stream so it will cost less. Besides, we also want to buy gas from Iran. The agreement has been finalized and we will buy this gas. But as 250MW electricity is needed here, we must give them the gas. In the whole world domestic gas is on LPG and we are finishing our resources by distributing it to domestic users, we should give it to industry even if it means economizing on the domestic side, we must give gas to the industry, otherwise industry would not be established. Therefore the policy and strategy should be changed; priority goes to industry, electricity production. So please devise the strategy and projects like this is very much serving the

purpose, by utilizing gas and then producing electricity is a good plan. So please let us understand the strategy correctly and then implement it vigorously. Our country is the hub of this whole region. We should know that we need investment friendly environment, qualified cheap manpower. Government has devised a complete plan and is being implemented. Nine best universities from the developed world will come to Pakistan; we are having deal with them. They have agreed to come here. We will come up to their standard; we will bring their faculty, curriculum, Vice Chancellor etc. So they will award their own degree, students’ wont need to go abroad. We will be able to attract investment with the best quality cheap manpower. Secondly we have emphasized technical side, we have established National Vocational Technical Commission and technology parks will be made in these nine universities which will produce technicians of very high quality for your industry and those will be exactly in accordance with the requirements of your industry. Therefore we are trying to create a synergy between the industry, production of technicians, and production of engineers. It will benefit industrialists. If you will provide all these facilities here then the investors will get profitability here in Pakistan. At the moment, demand has increased in Pakistan while supply has left behind creating a gap between two. Being a hub we can export to half of the world, if we l establish industry here. We will provide these facilities with good infrastructure, which is being developed i.e. rails, roads and ports. This is not a dream but a reality and we should have faith in this reality. I have faith in this nation. This will rise because we have the potential. We do not need any one’s assistance, we have to wake up, work and make use of our capabilities. We have the best minds in the world, we should be proud of it. But we have not optimized it. So if we will organize and optimize ourselves that is the way forward. We can take this nation to new height because we have all the potential and we have all the resources. We will generate more resources. Industrialists have many responsibilities. Firstly, you are installing modern units which are environment friendly. This is a good thing. You should come up to the standards of the world. You must comply with all safety regulations. Our productivity index is low. We should be more efficient, more hardworking; productivity from the same unit, from the same people should be much more. Poverty has reduced lot but still it is there. Every third man was poor, 34% were below poverty line which is now 25%. It is terrible, it is shameful. On the one hand you are creating job opportunities, we are thankful for it; seven lac job opportunities are being created till 2011. It will alleviate poverty and resultantly extremism and terrorism. On the other hand providing facilities, look after their welfare, Labour’s welfare. If you earn money, share it with labour. If you will care for poor, you will progress more. So share your profit with your workforce. must develop labour standard with all facilities of labour colonies so that they may get all facilities of life and live a comfortable life. We owe this to the labour. You are establishing industrial areas in agricultural areas. Sialkot is a rice growing area. One of the concepts of motorway was to bring industry out of city to the areas where agriculture is affective. Secondly, land should be cheap. Both these things are available on interchanges between Lahore and Rawalpindi. If gas and electricity facilities are made available then industry will be benefited without affecting agriculture. When we will shift industry there, population will be shifted there. Free land is vanishing rapidly. Population will be shifted to the area where space is available. I am happy to be here for a project which needs to be emulated by the whole of We Pakistan. A project which should be seen by the world to come and see what we have done here, to invest here because Pakistan will provide all facilities. I wish you success and prosperity and through your success, welfare of the labour, labour also rises, labour becomes better and there is more employment and there is more prosperity. Thank you, ladies and gentlemen.