News Desk |
Prime Minister Imran Khan announced, on Friday, that Pakistan is all set to welcome economic stability by the month of July this year, which will usher in a new age of prosperity, growth, and progress through rampant trade revival and large-scale industrialization.
Syed Mazhar Ali Nasir, adviser to the President of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) quoted PM Khan’s statement, ‘Pakistan will welcome economic stability by July 2019, when the rupee will also be stabilized.”
PM Khan made this statement during his addressed to Karachi’s business elite gathered at the Sindh Governor House on Friday. The gathering was attended by Abdul Razak Dawood, Adviser to the Prime Minister on Commerce and Industries, and Sindh Governor Imran Ismail.
This indicates that Islamabad will receive the first share of the loan in either June or July, once PM Imran Khan has implemented necessary measures to ensure economic stability.
Nasir added that PM Khan assured the business community that the federal government is undertaking measures to boost exports and develop domestic industries in order to facilitate economic stabilization process and create alternatives for imported products which will be produced by Pakistan itself.
IMF Kitty Doles out $6 Billion
On 12th May, a staff-level agreement was signed between the government of Pakistan and the International Monetary Fund (IMF), allocating a loan for $6 billion in a programme spanning over 39 months.
In exchange for the bailout package, the IMF has put forward certain conditions that have attracted loud criticism from politicians and economic analysts. These conditions include depreciation of the rupee against the US dollar, and heightened increases in key interest rates, which has left the economy disheveled and dismantled in a matter a few days.
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In a press briefing, Gerry Rice, IMF’s Director Communications stated that the bailout package is aimed at aiding Pakistan in improving its public spending and reducing its public debt. Rice stated, “We hope that the programme can also create fiscal space for a substantial increase in social spending to strengthen social protection as well as infrastructure and other human capital development.”
The IMF board is yet to announce its final approval to commence the execution of the bailout program, which is expected in June. This indicates that Islamabad will receive the first share of the loan in either June or July, once PM Imran Khan has implemented necessary measures to ensure economic stability. On 11th June, Islamabad will announce the budget for the fiscal year 2019-20, which will be implemented from 1st July.
PM Khan urged the business community to step up and play an instrumental role in addressing the challenges of financial insecurity and widespread poverty.
Critics and opposition leaders have criticized PM Imran Khan and his appointed ministers of delaying the impending negotiations with the IMF over a bailout package in attempts to gaining substantial loans from China and the Kingdom of Saudi Arabia, which did not materialize upto the premier’s expectations. Critics argue that this unnecessary delay has given rise to a period of economic uncertainty and instability in Pakistan.
Benefits for the Business Community
PM Imran Khan also added that the Federal government has identified the need to promote and facilitate small and medium-sized enterprises (SMEs) to uplift the economy, as this crucial sector has an instrumental role in generating job opportunities and raising production. Express Tribune cited Nasir’s remarks, “We have proposed to the prime minister to appoint a full-time minister for the SME sector.”
The advisor to the FPCCI President added that PM Khan is maintaining close correspondence with Pakistan’s business community to address economic challenges across the corporate world. On 19th May, members of the business community were invited to Bani Gala for a meeting with the premier.
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A statement published by the Press Information Department (PID) stated that PM Khan urged the business community to reap advantage from the recently issued amnesty scheme, and assured that the federal government is dedicated to uplifting businesses. Moreover, PM Khan urged the business community to step up and play an instrumental role in addressing the challenges of financial insecurity and widespread poverty.
PM Khan announced that the PTI-led government has create a team of experience economists, including Governor State Bank of Pakistan, Dr. Reza Baqir and Chairman of the Federal Board of Revenue, Shabbar Zaidi.
Rising Costs of Doing Business
During his meeting with the business community, the premier was informed of the many challenges faced by entrepreneurs, investors, and industrialists operating across the country. They lamented that the cost of doing business in Pakistan had risen unexplainably during his tenure, primarily because of the sharp depreciation of the rupee against the US dollar, not to mention the heightened key interest rate.
Siraj Kassam Teli, another influential businessman stressed that the federal government must ensure discretion and confidentiality for businessmen and investors who chose to advantage from the amnesty scheme.
Since December 2017, the rupee has by a staggering 43% at Rs150.91 against the US dollar, while interest rates have risen to an alarming 12.25%.
ET reported that influential businessman, Aqeel Karim Dhedhi stated that the staggering increase in interest rate had “discouraged new investment”. He added that the banks have chosen to provide available liquidity to the government to reap profits from such high rates of returns while becoming hesitant in loaning out to the private sector. Dhedhi informed PM Khan, “This situation doesn’t favor industrialization.”
SM Muneer, former CEO of the Trade and Development Authority of Pakistan (TDAP) suggested PM Khan against repealing the zero-rating facility for five textile export sectors, stating that would only generate new vehicles of corruption.
Read more: IMF Reaches Staff-Level Agreement on Economic Policies with Pakistan
Siraj Kassam Teli, another influential businessman stressed that the federal government must ensure discretion and confidentiality for businessmen and investors who chose to advantage from the amnesty scheme.