(August-19-2023) 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 welcomed the caretaker federal cabinet and said that the cabinet consists of reputed and capable people.
Finance Minister Dr. Shamshad Akhtar, who is a world-renowned economist, will be dealing with the IMF, resolving debt problems, trying to keep the exchange rate in balance, reducing interest rates, and taming inflation, which will be a challenge, he said.
Mian Zahid Hussain said that due to the sharp increase in fuel prices and the devaluation of the rupee, inflation is increasing instead of decreasing. Without reducing inflation, it is impossible to cut interest rates.
Talking to the business community, the veteran business leader said that interest rates are being heavily relied upon to reduce inflation while administrative and other measures are being ignored, due to which these efforts are not succeeding.
Inflation can be reduced by administrative measures, after which it will be possible to reduce the interest rate, which will improve the condition of the economy and allow the government to pay less interest on the payment of local debts, he said.
The business leader said that the government will benefit from the expertise of Special Assistant to the Prime Minister Dr. Waqar Masood, who is a seasoned and well-known practising economist.
He said that the price of oil in the international market is increasing because of the reduction in production by OPEC, due to which the government also has to increase the price of oil, which is increasing inflation.
To remedy this, Pakistan will have to increase the share of renewable energy in its energy mix while giving more concessions to electric automobiles. On the other hand, the tax collection system is also very weak; except for the salaried and the industrial sector, no one is ready to pay taxes.
In Pakistan, 4000 billion rupees of tax is evaded annually, therefore, the government has to collect indirect tax, which affects the poor.
Mian Zahid Hussain said that the caretaker Finance Minister will have to immediately manage a huge amount of foreign exchange so that there is no obstacle in the payment of loans and interest, while caretaker Commerce Minister Dr. Gohra Ijaz, who is a popular figure in the business community, must attract domestic and foreign investors to invest in Pakistan.
He is facing tasks like increasing production, exports, investment, improving investment laws and climate, and reducing business costs.
In this regard, the Special Investment Facilitation Council can prove to be a game-changer. Apart from this, there should be meaningful reforms in the power sector, and the government should get rid of state-run companies that are wasting one trillion rupees annually as all efforts to improve their performance in the last several decades have failed.
