ISLAMABAD – FPCCI’s presidential candidate, Atif Ikram Sheikh said on Monday that the efforts of the government are continuously strengthening the rupee against the dollar, which is a great achievement.
Due to the initiatives of the government, the prices of various commodities are decreasing in the market, which is giving relief to the public and the business community, he said.
Atif Ikram Sheikh, who has also served as VP FPCCI, Chairman PVMA, and President ICCI, said in a statement issued here today that while government efforts are laudable, the only way to stabilize the rupee on a permanent basis is to increase exports and discourage unnecessary imports.
Remittances bring huge foreign exchange to the government, but they also encourage unnecessary consumption, he said.
Atif Ikram Sheikh said that consumerism has also been on the rise for decades, and investors have been attracted to non-productive sectors rather than industries where profits are high.
Our economic model is disproportionately dependent on consumption. Pakistan over the last ten years has been maintaining consumption in excess of 80 percent of GDP, and more recently, its contribution to GDP has been as high as 90 percent in FY-22 and 88 percent in FY-23.
Reliance on consumption has led to a scenario where consumption is effectively driven by imports. GDP growth is fueled by consumption, which is inadvertently fueled by imports.
The dollars required to fund these imports are provided by a mix of exports, remittances, and external debt. As consumption continues to take up a significant component of imports, sufficient resources are not available to utilize imports for investments, resulting in a slowdown.
Unless the export sector is made the most profitable, investment in it will remain low, and foreign investment will also be less than desired.
He said that the agricultural sector can be a cause of earning foreign exchange along with improving food security in the country for which this sector should be developed.
Russia is supplying grain to the whole world, while Pakistan’s canal system is five times that of Russia, but we have to import wheat, cotton, vegetables, and pulses, which is sad.
If the farmers are protected from substandard seeds, spurious agricultural drugs, substandard fertilizers, and loan sharks, the situation can improve, he said.
