Unbearably high electricity and gas tariffs have become the single greatest threat to Pakistan’s industrial sector, pushing it towards inevitable collapse unless prices are brought to regionally competitive levels, a prominent business leader warned on Tuesday.
Zubair Motiwala, Chairman of the Businessmen Group (BMG), identified crippling energy costs as the leading factor behind widespread factory closures, rendering locally manufactured goods uncompetitive at home and abroad.
In a comprehensive review of the past year, Motiwala described 2025 as one of the most challenging and turbulent periods for Pakistan’s economy, defined by deep-rooted challenges, policy uncertainty, and sustained pressure on the nation’s productive sectors. He asserted that while the country was preoccupied with economic firefighting, trade and industry paid the heaviest price through shrinking margins and an increasingly hostile operating environment.
Amid the economic turmoil, he noted that Indian aggression during the Pakistan-India Conflict in May 2025 was handled decisively and responsibly under the leadership of Field Marshal Syed Asim Munir. Motiwala stated that a prompt and effective response, reflecting national unity, prevented a prolonged conflict, thereby safeguarding economic stability and business confidence.
Despite the severe difficulties, Motiwala acknowledged that 2025 was not entirely devoid of positive developments. He pointed to emerging macroeconomic improvements, including a sharp reduction in the policy interest rate from 23 percent to 10.5 percent, which provided significant relief to borrowers. Other stabilising trends included relative currency stability, better management of current account and trade deficits, an increase in foreign exchange reserves, and a revival in the stock market.
However, the BMG Chairman emphasised a stark disconnect between these macro-level gains and the troubling picture at the microeconomic level. He explained that conditions on the ground for the real economy remained under immense stress, with local industries struggling against high energy costs, excessive taxation, regulatory pressures, and weak consumer demand. Exports also failed to gain momentum, largely stagnating or declining due to structural inefficiencies.
Motiwala described the federal budget for 2025 as “deeply disappointing” for the business community, claiming it introduced anti-business measures that burdened already struggling enterprises. He criticised the budget for leaning heavily on increased taxation and the withdrawal of concessions rather than offering incentives for expansion, exports, or job creation, which he argued weakened Pakistan”s regional competitiveness.
A rare positive development highlighted by the Chairman was the successful privatisation of Pakistan International Airlines (PIA) towards the end of the year. He described the long-pending transaction as a “light at the end of the tunnel,” sending a crucial signal that difficult but necessary structural reforms are achievable with sufficient political will.
Looking ahead to 2026, Motiwala stressed that the new year must mark a decisive break from policies of coercion and fear-based compliance. He categorically stated that punitive actions like raids and arrests have historically failed to deliver sustainable revenue, instead causing capital flight and eroding investor trust. He warned that no investor would commit capital in an environment dominated by unpredictability.
He advocated for an urgent shift towards a policy framework centred on liberalisation, facilitation, and partnership with the private sector. According to Motiwala, economic revival can only be achieved through trust and incentives that encourage businesses to invest and expand, not through force.
The BMG Chief also called for an immediate rationalisation of the regulatory landscape, noting that an excessive number of federal, provincial, and local agencies with overlapping mandates increase compliance costs and create opportunities for harassment.
Further criticising existing policies, he pointed to sharp rises in the minimum wage without corresponding productivity gains and a proliferation of taxes, such as the 1.8 percent cess on imports, that collectively stifle industrial growth and discourage modernisation.
Motiwala expressed frustration with the government”s practice of forming committees to address economic challenges whose recommendations often go unimplemented. He advised the Prime Minister to constitute focused, time-bound committees on specific issues, including energy bill reduction and curbing tax theft through technology, to achieve sustainable results.
He strongly urged that Chambers of Commerce and trade associations be given meaningful, result-oriented roles in policymaking, leveraging their ground-level expertise. He noted that the Karachi Chamber of Commerce and Industry (KCCI) is already preparing detailed proposals for the 2026 federal budget and stands ready to assist the government.
In his concluding remarks, Motiwala framed 2026 as a critical crossroads for Pakistan, presenting a clear choice: either continue with policies that suppress enterprise or embrace liberalisation to unlock growth, employment, and prosperity.