Page 14 - CMA Journal (May-June 2025)

Exclusive Interview

ICMA: How do policy changes and regulatory
uncertainty impact business sustainability in your view?
A stable industrial policy is
Muhammad Ali Tabba: Policy instability remains one of
the most significant threats to business continuity in essential. Predictable, bipartisan
Pakistan, with far-reaching implications across the frameworks— especially for key
business landscape.
sectors like textiles, automotive,
A key consequence is the loss of investor confidence.
Both domestic and foreign investors depend on IT, and mining—build investor
predictable policies to make long-term decisions.
Sudden reversals of incentive schemes—such as those in confidence and enable
the auto or textile sectors—undermine trust and
discourage investment. long-term planning
It also distorts market competition. Selective
enforcement and exemptions create an uneven playing
export-led growth, regulatory reforms and better market
field, eroding transparency and professionalism while
access support are crucial to diversify and strengthen our
favoring specific interests over merit.
export base.
In the export sector, abrupt policy shifts disrupt supply
Lastly, sustainability must be built into policy. Incentives
chains, weaken reliability, and harm Pakistan’s credibility
for ESG compliance—such as carbon credits, green
in global markets—posing a risk to long-term trade
financing, and support for certifications—are now
relationships. Moreover, policy ambiguity hampers ESG
essential for global competitiveness.
progress. Unclear environmental regulations and
fluctuating energy tariffs discourage businesses from ICMA: What impact do you think lowering duties on
investing in sustainable practices, slowing the transition fully built vehicles and increasing imports could have
to greener, future-ready models. on investor confidence and the domestic economy?
ICMA: What key steps should Pakistan take to Muhammad Ali Tabba: Lowering duties on completely
strengthen local industries and ensure their built units (CBUs) and increasing vehicle imports could
long-term sustainability? negatively impact investor confidence and the domestic
economy. It would undermine localization efforts made
Muhammad Ali Tabba: In my view, revitalizing Pakistan’s by OEMs and vendors based on government
industrial base requires a focused, long-term strategy commitments, signaling policy inconsistency and
built on stability, innovation, and competitiveness. discouraging future investment.
First, a stable industrial policy is essential. Predictable, Higher imports would also strain foreign exchange
bipartisan frameworks—especially for key sectors like reserves and risk job losses across assembly plants, parts
textiles, automotive, IT, and mining—build investor suppliers, and support services. The broader auto
confidence and enable long-term planning. Energy reforms ecosystem—including logistics, showrooms, and service
must prioritize indigenous and renewable sources, reduce networks—would suffer. Though consumers may benefit
circular debt, and introduce smart grid solutions to ensure from more options in the short term, the long-term harm
reliable, affordable power—critical for industry. to local industry, employment, and economic stability

We also need a stronger financing ecosystem. SMEs in would outweigh these gains.
particular struggle with access to credit. Expanding Export ICMA: What risks do you see from increased imports of
Refinance Schemes and promoting asset-backed lending, used cars for local manufacturers and employment?
supported by risk-sharing mechanisms, will help unlock
their growth potential. Infrastructure modernization is Muhammad Ali Tabba: The unchecked import of used
overdue. Industrial zones, ports, logistics, and rail cars poses serious risks to local manufacturing,
networks need expansion and alignment with CPEC employment, and the economy. These imports directly
Phase-II to reduce costs and boost exports. compete with entry-level new models, stalling growth in
the domestic auto sector and opening the market to
To stay globally competitive, we must incentivize outdated vehicles from abroad.
technology and innovation—with support for R&D,
digital adoption, automation, and green energy They also bypass local parts and vendor networks,
solutions. Equally important is developing talent. reducing domestic value addition and threatening
Bridging the skills gap requires upgraded technical thousands of jobs linked to assembly, manufacturing,
education and stronger industry-academia linkages. For and services.
12 ICMA’s Chartered Management Accountant, May-June 2025