(February 24-2023) Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Friday said the reports of a two to three percent increase in interest rate by State Bank under the demands of IMF are disturbing.
This decision will increase the cost of doing business, bank defaults will increase, new investments will stop, and many businesses will close down which will increase unemployment, but the fall of the rupee will be somewhat reduced, he said.
Mian Zahid Hussain said that the interest rate is already seventeen percent which has increased the burden on the business community and the further increase will be disastrous for them.
Talking to the business community, the veteran business leader said that the public and the business community are already worried about the increase in the prices of oil, gas, electricity, and other commodities and they are not able to bear the burden anymore.
The state of the country has become such that the higher authorities are calling loans and extensions in the repayment period of a loan as a piece of great news.
Presently there is a shortage of industrial raw materials, medical equipment, and medicines due to import restrictions.
Mian Zahid Hussain said that Pakistan’s exports are alarmingly low. Imports have always been promoted which has left Pakistan with a current account deficit of $20 billion forcing it to accept humiliating terms from lenders.
India has not borrowed from the IMF since 1991, and Bangladesh’s recent borrowings, first since 2012 have not been taken out of necessity but as a precautionary measure.
Due to non-borrowing, the economy of these two countries is continuously stabilizing, while Pakistan’s economy is nose-diving due to the accumulation of debts and the lack of required economic reforms.
Now the crisis reached its peak and IMF has linked the debt to reforms. Pakistan has never paid attention to health and education, due to which the country fell into the grip of poverty.
If the import of non-essential food and luxury goods is stopped, it is possible to save four billion dollars, four billion dollars can be saved from the proper use of electricity, and seventeen billion dollars from import substitution of agriculture, energy, and transparency in government purchases. Billions of dollars in savings are possible, but reforms have never been implemented and there is little hope for the future due to the current political infighting.
Mian Zahid Hussain said that the government of India has more than 600 billion dollars, while its private sector has more than 400 billion dollars, while the government of Pakistan has only 3 billion dollars.
