KARACHI: Ziauddin University presented the 13th interactive series of ZU Dialogues, on “Pakistan’s Economic Problems: A debate on out-of-the-box solutions.” The solution might help to improve the problems faced by Pakistan and its people.
During the dialogues session Shabbar Zaidi, former Chairman of the Federal Board of Revenue (FBR) said that “We import $30 billion worth of energy products, $8 billion worth of food, $10 billion worth of services, $4 billion worth of pharmaceutical products even though we don’t produce a single medicine, $10 billion worth of machines. We are not here to talk about what happened; rather, we are here to talk about what we will do going forward. Our current financial situation makes it impossible for us to pay our bills.”
“As you provide the solutions you will start to notice Pakistan’s daytime energy consumption regulations from tomorrow; after daylight, no commercial activity should be undertaken; in that case, you would save 3500 megawatts, which cost between $2 and $3 billion. This is the first thing that should be done tomorrow outside of the box,” he further explained.
“Second, stop doing experiments and wasting Pakistan’s time. On the fiscal side, whatever laws and policies other nations are adopting, we will accept them as well, unless and unless you are capable of resolving the issues on your own. Immediately conclude the experiment on Pakistan’s economic side and embrace whatever foreign taxes or finance you should need. As Pakistan is heading towards ruin. The third out-of-the-box option is that the capital of Pakistan’s financial sector, including the state bank and regulators SECP, FBR, OGDC, and PEMRA, must be transferred to Karachi because the Islamabad system is not beneficial to the country’s commercial sector”, he expressed his views.
In response to a question, Shabbar Zaidi replied that we had to go to the IMF because, at the time, we had only 20 billion dollars, and since we no longer have that much, it is the only place to acquire money if you still harbor animosities toward America. The IMF is under American control. If you still have resentments and don’t want to go to the IMF, go ahead. However, keep in mind that if we don’t go to the IMF, we have a 156 billion dollar run over. If we don’t go to the IMF, send me the 156 billion dollars from somewhere else so I can pay off the loan our nation is now under.
Describing the three main issues Dr Shahida Wizarat, Dean of College of Economics and Social Development, Institute of Business Management, “there are many issues, but recently we found that Pakistan’s debts are becoming unsustainable, which means that the nation is unable to pay off its debts. In addition, as the price of gasoline and electricity rises, people are becoming concerned about how they will be able to eat while paying their bills. Only the middle class, lower-middle-class, and industries are affected by the tax issues.”
“Third, the government implemented a monitoring policy that raised lending rates to mask the issue. However, landing rates can only be raised when demand-pulling inflation is present, as it is in Pakistan. When we raise such prices, the cost of doing business goes up, and when the cost of doing business goes up, it pushes inflation costs higher,” she added.
Dr Wizarat further said that If we go to IMF again, it implies you already agree that Pakistan is in default or soon will be a defaulter. If you don’t have dollars, we don’t need to import luxury items, therefore we need to strike a balance in crisis management. Middle-class people are having difficulties because some wealthy people are accustomed to such luxury goods. We must halt imports.”
While explaining his point of view, Dr Shahid Hasan Siddiqui, an eminent economist and Chairman, Research Institute of Islamic Banking & Finance said, “after entering power, our politicians implement social policies as well as other measures. If they feel the need to disobey the law in order to implement their preferred policies, they do so and place the whole responsibility on Pakistani citizens.”
“The second 111(4) income tax ordinance needs to be dismissed because, in my opinion, the real source of our problems is trading losses rather than current accounts.
Copyright Business Recorder, 2022