Urgent appeal to the Prime Minister amid ongoing firm exits
The Islamabad Chamber of Commerce and Industry (ICCI) has publicly urged the Prime Minister to intervene with immediate, decisive measures to stop the steady exodus of firms from Pakistan. Drawing on rising concerns about investment flight, job losses, and the long-term impact on economic growth, the ICCI stressed that time is of the essence to restore confidence among local and international business communities.
Industry leaders warn that if the current trend continues, Pakistan could face a contraction in manufacturing, higher unemployment, and a widening deficit. The ICCI’s call centers on a comprehensive package that addresses the root causes of firm exits—policy uncertainty, rising costs, energy reliability, and access to finance—while presenting a credible path to competitiveness for domestic enterprises.
Root causes driving firms to relocate or close
Several factors are cited by business associations as driving the decision to relocate or shut down operations in Pakistan. Key elements include inconsistent energy supply and volatility in energy prices, bureaucratic hurdles, high taxation levels relative to regional peers, and constraints in ease of doing business. In some cases, firms report more favorable regulatory environments and better infrastructure in rival markets, prompting leadership teams to rethink footprints and supply chains.
Smaller and mid-sized enterprises, which form the backbone of employment, are particularly sensitive to cost pressures. As costs rise and margins compress, some firms explore options to scale production in neighboring economies or relocate higher-value activities to regions with more predictable policy environments.
What the ICCI recommends to the PM
The ICCI’s proposed action plan centers on four pillars designed to stabilize the business climate and make staying in Pakistan a more attractive option for firms:
- Policy coherence and predictability: Accelerate reforms that reduce red tape, improve transparency, and ensure consistent application of tax rules.
- Energy reliability and cost management: Restore steady energy supply, promote cost-effective power solutions for industry, and offer targeted relief for sectors most impacted by fluctuations.
- Access to finance: Expand affordable credit lines for working capital, export-oriented activities, and modernization projects, with safeguards against credit shortfalls.
- Incentives for domestic investment: Design selective incentives that reward reinvestment, local value addition, and exports, while safeguarding fiscal sustainability.
The ICCI also calls for a robust outreach program to engage business leaders in policy environments. Open dialogue with chambers, associations, and regional business councils can help calibrate measures, ensuring reforms translate into tangible improvements on the ground.
Rebuilding confidence: the broader implications
When firms remain or return, the positive ripple effects extend beyond the balance sheets of individual companies. Stable employment prospects attract skilled labor, boost consumer demand, and improve tax collection without triggering unsustainable rates. Moreover, a stable business climate can attract foreign direct investment by signaling a reliable, predictable environment for long-term projects.
Analysts emphasize that any package should be accompanied by clear benchmarks and timelines. Public communication about progress, coupled with transparent reporting on how incentives are used, can help restore trust among investors, suppliers, and workers alike.
Conclusion: a critical moment for leadership
The ongoing exit of firms from Pakistan is a signal that business confidence needs a rapid, credible response. The Prime Minister’s administration now faces a pivotal test: implement decisive, well-targeted policies that address immediate pain points while laying a foundation for sustainable, long-run competitiveness. If the proposed measures are well designed and effectively executed, Pakistan can not only stem the current outflow but also encourage reinvestment that strengthens the economy for years to come.
