KARACHI: Chairman of the National Business Group Pakistan and President of Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain has expressed concerns that the rupee is constantly weakening, the dollar is becoming more expensive, imports are rising, and the current account and fiscal deficits are growing, which need to be addressed otherwise Pakistan will soon be bankrupt like Sri Lanka.
He said that duty on at least a dozen sectors should be increased by 200-300 percent to cut the import bill. He was of the opinion that the weak economy could no longer afford shocks from aggressive politics. Rapidly deteriorating economic situation and rising political temperatures provide the “perfect combination” to bankrupt the country.
He said that economic instability and uncertainty in the country were compounded by delayed decision-making as well as contradictory statements made by key leaders. While the situation in the country is worrisome, the war between Russia and Ukraine had resulted in inflation, shortage of agricultural commodities and unrest on the global level, he said.
The new government has yet to come up with a clear economic strategy and the manner in which it intends to deal with the evolving situation, he said.
The common people as well as members of the business community had breathed a sigh of relief when the present government had come into power as they were expecting an improvement in the economic situation but their optimism has by now given way to despair.
Mian Zahid said that the friendly countries had given only assurances to the government after which it had no option but to go to the International Monetary Fund (IMF) for a loan.
He noted that inflation is already high at 13 percent which will increase further if IMF conditions are imposed. This will dent the reputation of the government but there is no other way to bridge the deficits. If the bitter pill of IMF conditions is not swallowed then the economy will be destroyed within months, he said.
He said the present government was well aware of the poor state of the economy, the economic landmines laid by its predecessor and overall precarious economic situation. So, if it did not have the courage to take tough decisions in national interest then what was the need to assume power?
The country is entering a nearly impossible situation. It has probably never seen such weak political and economic conditions since its inception, said economic and financial analyst Ateeq-ur-Rehman.
To cope with such circumstances not only the government but also the masses will have to participate in some voluntary restraint. “As a matter of fact, we need to build a consumer society otherwise nobody on Earth can save us from crippling default.”
In the international market, palm oil price has reached $1,800, he said. This calls for reduction in our consumption of palm oil to save our foreign exchange.
“The Brent has reached $ 110-115, so we definitely need to decrease our petroleum usage to save our economy from the growing balance of payment crisis.
“Further we have to regulate our uncontrolled travelling; only last month we purchased approx $400 million travel tickets and spent additional approx $750 million on travel and allied services, boarding and shopping, etc.
“We cannot afford this in the current economic situation... Still the import of luxury items, including cars, mobiles phones, food and confectionary items is continuing,” he said.
“This is a very serious matter; if we do not put restrictions on the import of such luxury items immediately there are chances of landing into turbulent economic conditions — the trade deficit, current account deficit and balance of payment crisis will continue to increase.”
Copyright Business Recorder, 2022
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