Russia-Ukraine conflict: SAARC chamber chief urges South Asian states to carefully reshape monetary policies

LAHORE: President SAARC Chamber of Commerce and Industry Iftikhar Ali Malik on Monday urged the South Asian countries to carefully reshape their monetary and fiscal policies to counter external shocks and protect the vulnerable while laying the foundation of green, resilient and inclusive growth in the wake of Russia-Ukraine conflict.

Talking to a delegation of women entrepreneurs led by Maheen Kashif the popular octogenarian trade leader said that conflict will gradually slide down the growth of fragile and uneven South Asia due to persistent economic challenges. He said South Asian countries are already grappling with rising commodity prices, supply bottlenecks and vulnerabilities in financial sector.

He feared the conflict will put the world on the brink of food crisis paving way for starvation of millions. He said rising fuel prices have sparked a frantic search for alternative energy and those crops are increasingly attractive besides skyrocketing food prices will ignite protests and unrest.

He said war will amplify those challenges further contributing to inflation, increasing fiscal deficits and deteriorating current account balance. He said South Asia confronted multiple shocks in the last couple of years including the scarring effects of pandemic and higher oil, food prices will have a strong negative impact on real income of people.

Iftikhar Ali Malik analysing the emerging alarming situation based on his life long experience said Pakistan’s one of the major challenge in the current environment is its energy subsidies, the highest in the region. He said in India, household consumption will be constrained by the incomplete recovery of the labour and inflationary pressures. He said Maldives will face vulnerability due to its large imports of fossil fuels as share of GDP and reduction of tourists from both warring countries.

He said economic outlook of Sri Lanka is highly uncertain due to fiscal and external imbalances. He said higher food prices in Afghanistan will exacerbate food insecurity while Bangladesh’s exports will decline significantly due absence of orders from Europe.

While winding up Iftikhar Ali Malik said developing countries will suffer greatly despite no fault of their own. Most immediately, however, wealthy nations must accelerate efforts to get food into the hands of hungry population around the world especially in South Asia, he concluded.

Copyright Business Recorder, 2022