KARACHI: Senate Chairman Mian Raza Rabbani said on Tuesday foreign loans come with strings as lenders’ conditions infringe upon national sovereignty.

If a nation has a choice, then it should opt for increasing exports by promoting the indigenous industry and making it competitive, he said while addressing the 41st Export Awards ceremony of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

“I’d suggest that if we have a choice between exports and foreign loans, then we should go for the former in order to safeguard our sovereignty,” he maintained.

He said it was easy to get foreign loans. But when the payback time comes, it is always difficult to dish out funds to even pay the interest, leave alone the principle, out of scarce resources, he said.

Mr Rabbani said global lenders always impose conditions that infringe upon national sovereignty. They also try to influence the system, he said, adding that countries like Pakistan give away a portion of their sovereignty in the process.

Responding to the issue of the Engineering Development Board (EDB) raised by business leader Iftikhar Ali Malik, the Senate chairman said he would ask the relevant standing committee of the upper house to take it up with the government.

Mr Malik complained that the government has made the EDB ineffective, hurting local auto vendors. He suggested that the government should promote import substitution and encourage balancing, modernisation and renovation of sick industries.

FPCCI President Zubair Tufail expressed his concerns about the widening trade gap, saying Pakistan exported goods worth $20 billion against imports of $52bn in the last fiscal year. This situation is likely to deteriorate further because imports are expected to swell to $60bn by June 30, 2018 while exports cannot be more than $24bn, he added.

FPCCI former president S.M. Muneer said the balance of trade would not improve unless Pakistani exporters get a level playing field. He said the high cost of doing business has crippled the country’s export sector and made industrial activity unviable.

Published in Dawn, December 27th, 2017