KARACHI: Business community has urged the government to declare an economic emergency in the country and immediately impose restrictions on the import of unnecessary items for five years, including import of vehicles to save the precious foreign exchange.
They have also expressed serious concern on the current economic situation and urged the political parties to forget differences and work for the betterment of the country’s economy as political instability is directly hurting the foreign investment in the country.
While addressing a seminar “Strong Rupee-Strong Pakistan”, organized by Malik Bostan Chairman Forex Association of Pakistan, Arif Habib Chairman Arif Habib Corporation said that currently the shortage of foreign exchange is the biggest problem being faced by Pakistan. Actually, the country’s imports are much higher than exports and the country is facing a huge current account deficit, he added.
“Although exports and remittances posted healthy growth during this year, still they are not sufficient to finance the current account deficit,” he added. He urged the government to provide overseas Pakistanis with investment opportunities in the country.
He said that there is a need to work for the country without any political differences. He also urged the political parties not to divide the society as political instability is directly hurting the foreign investment in the country. He requested the business community to come forward and put the pressure on political parties for an economic charter putting the political difference aside.
“The country is facing economic challenges and despite being an agricultural country we are compelled to import commodities like wheat and sugar because of mismanagement”, he added.
Arif Habib said that the IMF confidence is necessary to bring more foreign inflows in the country and in the current economic situation, there is a need to accept the IMF conditions as the Pak Rupee has fallen sharply in recent months and investors are reluctant to invest in the current uncertainty.
He also asked the government to make a long-term policy for healthy growth in the country’s exports and stop the unnecessary imports including vehicles for next five years. “We can stop devaluation of Pak Rupee and save 15 to 18 billion dollars annually by stopping unnecessary imports,” he added. He also urged the political parties to forget differences and work for the betterment of economy.
Mohsin Sheikhani, Chairman Association of Builders and Developers (ABAD) said that the political turmoil in the country has created a chaos in the country and investors are reluctant to invest.
He said that it has become a necessity for the economy to obey the IMF conditions. He urged the Finance Minister Miftah Ismail for immediate implementation of the IMF policy to rebuild the depleting foreign exchange reserves of the country.
Malik Muhammad Bostan said that the country is facing serious economic challenges and an atmosphere of instability is being created in our country.
He said that Pakistan’s armed forces are being criticized through social media and the enemy is making policies to destabilize Pakistan by creating differences among the Pakistan’s armed forces and nation.
Presently, the enemies of Pakistan are creating suspicion in the hearts of the people against the Pak army through social media and encouraging them to stand in front of the armed forces, he said.
“We have the example of Syria, Iraq and Libya. The people of these countries were against their institutions and resultantly these countries were destroyed. Our enemies also want to destroy the economy of Pakistan by waging civil war in Pakistan,” Bostan said.
He quoted the example of Ukraine and said that it rolled back the nuclear program on the request of the United States. The United States and NATO have promised to defend Ukraine. However, when Russia has attacked Ukraine, no one is defending it. “Today, if we do not support our military establishment, India will do the same to us”, he warned.
He said that Pak rupee continued to fall due to shortage of foreign exchange; however, the exchange companies are in touch with Finance Minister Miftah Ismail, acting Governor SBP Dr Murtaza Syed and other government officials for a long-term solution.
Bostan said that whenever there was an economic crisis in Pakistan, exchange companies bought billions of dollars from overseas Pakistanis through official channels to overcome the crisis.
Pakistan was facing the same situation of May 1998, when atom bomb was tested and Pakistan’s foreign exchange reserves were down to nearly 500 million, he mentioned.
He said that presently, the economy is on the edge of collapse and the rupee has been falling steadily for the past few months due to political instability and massive foreign borrowing. The Pak rupee was appreciating against dollar, when the government was changed a month back and fell from 189 to 181; however, since Imran Khan has announced a sit-in in Islamabad on May 20, the rupee is depreciating due to economic uncertainty, he added.
He said that exchange companies have played a vital role in increasing the value and foreign reserves of Pakistan by surrendering $60 billion in the inter-bank market during 1993 to 2022.
Malik Bostan said that commercial banks have increased the dollar rate by Rs 40 in the inter-bank market during the last eight months. If the inter-bank rate starts declining, the dollar rate in the free market could soon fall from Rs193 to Rs180.
The dollar is currently rising due to the political uncertainty and all-time higher trade deficit of $40 billion in the first ten months of this fiscal year. It could reach $50 billion by the end of this fiscal year, he predicted.
Chairman Forex Association said that the government should immediately take measures to reduce its monthly imports from $6.25 billion to at least $5 billion by imposing ban on import of unnecessary items. The government can save $12 billion annually by reducing the import bill and this amount can be used for the repayment of debt without borrowing fresh loans. In addition, exports and worker remittances should be increased by sending more skilled workers abroad, he mentioned.
He said that with these measures Pakistan will remain able to repay the foreign debt without obtaining more loans from the IMF and World Bank.
Bostan also urged the government for a round table conference for political and economic stability. For economic stability, the Charter of Economy should be signed by all political parties for long term and sustainable economic policies.
He suggested that as per estimate that about 2 to 3 billion dollars of cash is kept in homes and lockers by people. They want to convert Pakistani rupees; however, reluctant to sell the dollar due to ID card and Know Your Customers (KYC) condition. They should be allowed to sell dollars without ID. If SBP gives permission, a large number of exchange companies can buy these foreign currencies for the government.
On the occasion Zafar Paracha Secretary General Exchange Companies Association of Pakistan, Hanif Gohar former President FPCCI, Dr. Mirza Ikhtiar Baig, Abdul Majeed Pardesi, Hanif Galaxy, Hanif Memon and others also spoke.
Copyright Business Recorder, 2022