THIS refers to the news item ‘Islamabad needs to curtail imports, says Chinese envoy’ (March 30). What a pity that the Chinese are telling us to control unbridled imports to manage the economy? Pakistan’s adverse balance of payments is the mother of all the economic difficulties. We are exporting less and importing more; the exports being mere 40 per cent of the imports and the trade gap financed through borrowings.

Thus, the gross foreign exchange requirement this year is estimated at $30-35 billion from trade deficit and debt service obligations combined and could be higher next year. It calls for extraordinary measures to protect the external account from going under.

A sizeable chunk of the imports comprise luxury and avoidable consumer items for the well-to-do class, comprising less than 5pc of the population. It is the area where the dollar outflow can be easily compressed. The liberal, unrestrained and uncontrolled import policy must be revisited as well as the flawed Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) that have been signed with various countries.

It is benefitting the vested interests within the country as well as the foreign manufacturers while discouraging local entrepreneurship and innovation.

We must immediately ban the import of luxury and unnecessary consumer items to cut the import bill significantly and save dollars. Such a measure would not affect growth, employment or impact inflation. In fact, it will lessen the need to seek support for loans from, say, the International Monetary Fund (IMF). The resulting suppressed demand for dollars would have a salutary impact on the exchange rate that is now hovering over Rs180.

The economic policy thrust must be on import substitution as significant jump in exports is difficult to materialise in the short or medium term owing to capacity constraints in agriculture and manufacturing. Even the exports have high import content that complicate the balance of payments. From an import-based trading nation, we need to become a producing, manufacturing country. Nothing short of that will help resolve the issues that the country is facing for long.

Arif Majeed
Karachi

Published in Dawn, April 14th, 2022

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.