KARACHI: Fresh loan deal with the International Monetary Fund (IMF) will be suicidal decision for Pakistan. The Fund would force Pakistan to enhance tax revenue through more taxation, devaluation and frequent hike in the prices of petroleum, electricity and gas, etc.
Zafar Mahmood Shaikh, President/CEO Security Investment Bank said this on Monday. He shared his expert opinion with Karachi Editors Club President Mubasher Mir, Secretary General Manzar Naqvi and founding-members Javed Mahmood and Muhammad Arif, about the ongoing economic scenario in Pakistan and his suggestions for improvement in the national economy and to contain the rapid erosion. Zafar M. Shaikh is former managing director of the National Savings and ex-Director General of the Debt Management Office of the Ministry of Finance.
He said that the caretaker Finance Minister Dr Shamshad Akhter was toeing the agenda of IMF and her foreign masters and giving more serious jolts to the economy. The caretaker FM and the government was not supposed to take the strategic decision of frequent devaluation of rupee against dollar. Devaluation of one rupee means one hundred billion rupees increase in the national debt. He lamented that on Monday the dollar-rupee exchange rate has increased to over 125 rupees that exposes the bad governance of caretakers and their inability to control unwanted erosion in the strength of the local currency.
Zafar M. Shaikh claimed that the caretaker finance minister had been imposed on Pakistan under a well-thought out agenda of further destabilizing the economy of Pakistan and taking the country to the IMF to seek fresh loans with very tight and unbearable conditions for the masses and the country as well.
Daily devaluation of rupee, and hike in petrol prices twice and once in the electricity cost by the caretakers was disturbing for all and sundry in the country and this would cause a serious setback to the economy and consumers as well. The caretaker government don’t have powers to take this kinds of strategic decisions, he said.
To improve the national economy, he said the government must bring at par the imports with exports that would eliminate more than $33 billion trade deficit as the country was not in a position to bear this massive financial bleeding at this time.
He also pointed out that more than $15 billion imports are fake that are meant to send dollars abroad from Pakistan through banking channel. He said that fake LCs and invoices are being made to cover up fake imports and to send billions of dollars abroad every year.
To support his claim, he said that if the current imports are around $55 billion, the customs duty collection from imports should have been around $5 billion (more than Rs 500 billion) if we keep in mind average custom duty of only 10% on imports. Total annual tax revenue collection a year was lower than $4 billion and the customs duty share in tax revenue seemed less than $2.5 billion.
He also said that the dollar-rupee exchange rate should be fixed so that the manipulators could not play with it to mint billions overnight. If the caretaker finance minister and the government supported devaluation of rupee and did not fix the exchange rate, the country would be heading towards economic failure, he added.
In the interest of nation Government and the supreme court of Pakistan to order a probe to find out mega scam of billions of dollars frauds in fake imports that was leading to transfer of money from Pakistan to abroad.
BY: J. Choudhry
