KARACHI: Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain has said it will be very difficult to run the country without the IMF programme. Previous debts will have to be repaid at the rate of US 25 billion dollars annually, which will be a nightmare for Pakistan, he said.
Mian Zahid Hussain said that the government should present an alternative economic model to the public in view of the delay in the IMF programme.
He said that the country’s difficulties should not be increased by making irresponsible statements about the economic situation and instead of political sloganeering decisions should be taken according to the ground realities.
He said that a strategy should be formulated according to the facts, he said, adding that the current account surplus is welcome, but the reason for the improvement in the current account situation is not economic reforms, but the reduction of imports from US 80 billion dollars to 55 or 60 billion dollars per year.
Restricting imports is a temporary measure to avoid a default that cannot be sustained for long as Pakistan’s GDP has reached record lows, thousands of factories have closed and millions of people have lost their jobs. In any case, the current account surplus cannot increase to the extent that Pakistan can repay its debts of US 25 billion dollars every year.
Almost every sector of the economy has been affected by the measures taken to deal with the current account deficit, inflation, unemployment and economic instability have increased, the output of major industries has fallen by 25 percent, and foreign direct investment has declined by 98 percent, he informed. Mian Zahid Hussain said that millions of people are forced to work for low wages while many industries are operating far below their capacity.
The market is in a state of uncertainty due to the risk of default and continued depreciation of the rupee, which is also increasing inflation, but on the other hand, the depreciation of the rupee may increase exports and remittances from overseas Pakistanis.
US 30 billion dollars or Rs 9000 billion are used by Pakistanis annually from remittances, which confronts inflation and poverty.
He further said that the public and the business community had to pay a heavy price for current account management, which temporarily averted the risk of default, but it was shrinking the economy and tax and non-tax revenue of the government.
Copyright Business Recorder, 2023
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