KARACHI: Pakistan Business Forum (PBF) hopes fiscal space will improve the incumbent caretaker government. In a letter to the caretaker Prime Minister of Pakistan, Anwaarul Haq Kakar, PBF Vice President Chaudhry Ahmad Jawad said I would like to congratulate you on your appointment as the Prime Minister of Pakistan.
We hope, under your leadership, the dwindling fiscal space of our country will improve including paying attention on the deprivedness of Balochistan.
From August 2018 to August 9th 2023; Rs163 depreciated against one dollar and as a result, masses and businesses suffered a great deal, resulting in expensive imports, unprecedented inflation which is unbearable now for the common man.
Jawad said PBF have a very strong view that free float policy of the currency, initiated during the tenure of the last Parliament was and is not suitable.
The historic decline of rupee against the US dollar was an unprecedented event that had never been witnessed before in our history. Since 1947 until 1988, various governments approached the International Monetary Fund four times; however, 1998 onwards, it seems, seeking an IMF package had become more of a custom for any government, especially when no government wanted to reduce its expenses. The attitude was the same, whether we talk about the ministries, state-owned enterprises or the provincial governments.
Despite there being no end to expenses, the focus was never on reviving the agriculture sector, or working on small and medium enterprises to make them more viable to transform the country’s economy in the long run.
Thus, instead of building the capacity to pay back the loans, the government continued to borrow to service the previous loans.
This situation demands urgent attention as there is a dire need to stabilise the rupee by ending market speculation.
We expect an announcement from you with a clear policy on restoration of the rupee as there prevails a sense of disappointment in the trade and industrial circles.
As we believe that the real exchange rate of the dollar against the rupee is less than Rs200 for a dollar, and for all practical reasons, the current depreciation cycle is the direct result of speculative trading, lack of regulatory oversight and mismanagement of the forex market.
Country like Pakistan that has a trade deficit, a strong currency is a boon, not a bane.
We urge that you stabilise the currency to support the economic activity, as Pakistan has for long been a victim of a weak-currency fetish and that act will support too for the upcoming government after holding free and fair general elections in your tenure which is a basic requirement for the economic revival.
Copyright Business Recorder, 2023