KARACHI: While seeing a bumpy ride ahead, the business community believes the approval of a nine-month $3 billion Stand-By Arrangement will end a long-drawn-out period of economic uncertainty and volatility.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh said securing the IMF programme was indispensable at this critical juncture of the country’s economic history.
He said despite being tough on trade and industry, the businessmen were welcoming the IMF bailout programme in the greater national interest as it would open up inflows of external funding from bilateral, multilateral and international institutional sources.
The government’s economic team now should manage the external account prudently and proactively and avoid any such episodes of delays and procrastination in the macroeconomic decision-making, he stressed.
Asks govt to take advantage of this opportunity for radical reforms
The apex chamber chief said the business community is more concerned with the post-IMF SBA, medium to long-term consistency in economic policies; rather than a temporary breather to the economy and its costs to the trade and industry and that approach reflects the business community’s regard for the national interest and national economy.
He asked the government how and when it intends to take the business community into confidence on its commitments to IMF and their macroeconomic policy implications and what’s the plan of action for the much-needed economic stabilisation.
He said how policy formulation will remain apolitical and what the post-SBA, inevitable and longer-term IMF EFF programme will look like when the country will reach that point in Q4FY24, FPCCI chief added.
Korangi Association of Trade and Industry President Faraz-ur-Rehman cautioned that the IMF’s conditions, particularly related to power prices, would increase inflation, resulting in increasing the cost of production for industries.
Additionally, the lifting of import restrictions, as mandated by the IMF, is expected to put pressure on the value of the dollar once again, he feared.
Mr Rehman urged the government to seize this opportunity to implement concrete measures aimed at improving the economy and expanding the tax base. He emphasised the need to provide immediate support to the export industry to generate higher income.
He believed that the IMF programme would bring economic stability and enhance the fiscal capacity of the government.
Former Minister of State and Chairman Board of Investment Muhammad Azfar Ahsan said there is a dire need to attract sustainable foreign direct investment (FDI) and facilitate investors through a collaborative structure that can enable political governments, bureaucracy, and the military, to work together for translating the vision of Pakistan into action.
Talking of political will to streamline processes, he said, the country will need political stability to begin with. Lack of continuity in leadership roles is death to progress.
Published in Dawn, July 14th, 2023