Industry, trade leaders ‘tight-lipped’ over Naqvi’s remarks on governance reset

Trade and industry leaders expressed shock upon hearing Interior Minister Mohsin Naqvi's remark that the governance system had collapsed. Naqvi suggested the establishment of new administrative units to address critical challenges. However, trade leaders remained tight-lipped when asked to comment on the statement.

Saqib Fayaz Magoon, a senior vice president of the Federation of Pakistan Chamber of Commerce and Industry, described Naqvi's comments as political rather than economic. Magoon highlighted the high cost of energy, increased production costs, and difficulties in exporting products due to high energy expenses. He emphasized the need for tax ease, doing business facilitation, and reforms in the Federal Board of Revenue (FBR) to improve trade and industry functioning.

Most trade and industry leaders refrained from discussing the collapse of the governance system. They attributed it to the political framework and expressed a need for more time to understand the country's situation. The statement has exacerbated uncertainty for the already challenged economy, with factors such as the ongoing US-Iran war, fluctuating energy prices, and threats to Gulf markets compounding concerns.

Industrialists acknowledged the validity of Naqvi's assertion, stating that a collapsing governance system would make trade and industry more cautious, potentially hindering economic growth. The economy is already struggling to reach the 3.2 to 3.7 percent growth range. Investment remains crucial for economic growth, and the Gulf war has introduced significant uncertainty for both domestic and foreign investors.

Foreign direct investment in Pakistan declined by 34 percent in FY26, falling from $2.48 billion to $1.64 billion. Industrialists emphasized that a strong political system could create a more efficient working environment in the country, attracting necessary investments to stimulate economic growth.