Pakistan Business Council Driving the National Economy
The Pakistan Business Council was established in 2006 by fourteen of the country’s leading business groups and companies, including multinationals, covering a diversity of business activity. The PBC is not a trade body but was created as a forum for Pakistani businesses to address the challenges arising from progressive global and regional free trade and from the relatively sluggish trends in current national Investment flows, against the much higher levels needed to sustain Pakistan’s GDP growth at 7%-plus.
PBC works at producing position papers for review by business and appropriate Government authorities in addition to holding Lectures and Seminars and sponsoring Research. In time, PBC expects to be able to broaden its membership and activities, to include Advisory and Consultative services both to Pakistani and Foreign Investors.
The Pakistan Business Council is a private sector, not-for-profit, business advocacy group registered under Section 42 of the Companies Ordinance 1984. The group that began working as a 14-member group has now expanded to 32. The PCB follows an “evidence based” advocacy strategy relying heavily on regional and international best practices.
The major objectives of the PCB as stated in its founding document are:
• To provide for the formation and exchange of views on any question connected with the conduct of businesses in and from Pakistan.
• To conduct, organize, set-up, administer and manage campaigns, surveys, focus groups, workshops, seminars, and field works for carrying out research and raising awareness in regard to matters affecting businesses in Pakistan.
• To acquire, collect, compile, analyze, publish and provide statistics, data analysis and other information relating to businesses of any kind, nature or description and on opportunities for such businesses within and outside Pakistan.
• To promote and facilitate the integration of businesses in Pakistan into the World economy and to encourage the development and growth of Pakistani multinationals.
• To interact with Governments in the economic development of Pakistan and to facilitate, foster and further the economic, social and human resource development of Pakistan. Structure: The PCB Board has 14 members, thirteen of whom are elected from the Executive Members of the PBC while the CEO is the 14th member of the Board. The current composition of the PCB Board is as follows:
The current qualifying threshold for a non-financial sector company to be a member of the PBC is to have a paid capital of at least Rs. 1.0 billion or fixed assets equivalent to this value. For a financial sector company, the qualifying requirement is paid-up capital of at least Rs. 2.0 billion. Qualifying thresholds are for individual companies and group companies’ paid-up capita; and group companies’ fixed assets do not qualify. Additionally, the joining fee of Rs. 2.0 million and annual subscription
of Rs. 0.75 million has been fixed to encourage serious participation.
The PBC currently represents 32 of Pakistan’s largest private-sector business groups including multinationals, which cover nearly all sectors of the formal economy. Sector-wise representation is as follows:
The Pakistan Business Council’s efforts to improve the business climate and its emphasis on improving the competitiveness of large scale manufacturing in Pakistan has led to its being recognized as a premier representative body of the private sector in Pakistan. For instance, the PBC took a strong stance on the matter of RGST and presented valid arguments to gather support on the matter. The key points that the think tank presented could be stated as under: • RGST forces documentation which will help to
significantly reduce evasion. • Raise government revenues - increased investment in
infrastructure/human capital • Tax-to-GDP ratio (one of the lowest in emerging economics) set to improve after RGST. Lead to reduced corporate tax rate (highest in emerging economies) Will provide a level playing field to the formal sector increase FDI and local investment Overall to improve Pakistan’s competitiveness (alarming loss in ranking) In short, to achieve an accelerated economic growth rate to improve Pakistan’s global competitiveness, PBC strongly supported the RGST concept.
The alliance of different multinationals understands the problems of the country and it has tried to address issues like energy crisis, improvement of public finance and investors’ plight. Addressing the severe energy crisis the council had suggested: • accelerating development of theThar Coal project • revamping obsolete power generation, distribution and transmission facilities eliminating pricing distortions between different fuels and sectors created by taxation accelerating gas exploration in prospective zones in Balochistan and KPK. Despite the popular belief that multinationals do not favour tax reforms, PBC’s support of farms and real estate could also be presented as an argument to defend the neutral position of PBC. In response to Finance Minister Abdul Hafeez Shaikh’s recent stand regarding tax reforms, it has clearly declared that the government, including the provincial governments, have to increase their tax base by bringing taxed sectors of the economy into an effective tax net as opposed to imposing additional tax payers.
The stances that the council has taken so far reflect the positive energy its members are promoting in the country. It has witnessed the strong opinions they have held about energy and energy conversation, tax reforms, intra-regional trade and social issues such as health and education.
It would be appropriate to state that the PBC has risen from just being an alliance of MNCs and safeguarding their concerns as national integrity and economy has always been on its priority list. The prospects of the success of such alliances increase if a balance is maintained between corporate competition and the general interests of business culture