LAHORE, Sept 18: The Lahore Chamber of Commerce and Industry (LCCI) has urged the government to come up with an economic plan to check fast depletion of foreign exchange reserves, depreciation of rupee and control the widening current account deficit for restoring the confidence of businessmen.

LCCI President Muhammad Ali Mian demanded, in a statement on Thursday, formulation of an economic recovery plan because the foreign exchange reserves had gone down to $8.91 billion while rupee exchange value was touching the historic low at Rs77.60 versus dollar. The current account deficit had increased by $2.5 billion during July-August mainly owing to a slowdown in exports and rising trade deficit and slow foreign exchange inflows.

He said the economic plan should be prepared in consultation with stake-holders as the plan formulated without businessmen’s input would not give desired results as had happened in the past.

He said the fast falling exchange value of rupee had not only worsened the balance of payment position but had also raised the burden of Pakistan’s foreign debt and debt service liability. It would, he said, upset all the cost-price relationships in the economy, lead to galloping inflation, and would stall many ongoing projects owing to rising cost as the industries were heavily dependent on imported raw materials for industrial and capital goods and components. The cut in rupee value would raise industrial costs and reduce the intensity of capacity utilisation.

He said persistent decline in rupee value would cause a contraction in economic activity and consequential slide down in income tax receipts would raise the burden of foreign debt overnight. The government could not stop smuggling as long as black-market transactions in foreign exchange continued. Devaluation of rupee meant devaluation of Pakistani labour and talent in the international market who sent foreign exchange through home remittances. Devaluation would make Pakistan lose heavily both as seller and as a buyer and would make no good substitute for remedial changes in economic policies and developmental planning.

The chamber president said the government should not cut its expenditure but also exercise strong discipline over all unproductive expenditure, whether it be the public sector or the private sector.

The government should also effectively utilise the human resources, which was abundant in Pakistan and was under- utilised.