LAHORE: Pakistan Tehreek-e-Insaf Central Punjab General Secretary Hammad Azhar has said that a new government with a competent economic team and sound rescue plan needed right now to overcome the economic challenges.
“The rescues plan should base on three aspects: increasing exports, controlling government expenditures and overcoming energy crisis through energy conservation and importing cheap fuel. The work on these aspects should be done on emergency basis in the first 100 days of the new government, otherwise, the country will fall behind in the world,” the former federal minister said while addressing a press conference on Saturday.
He demanded that the country be handed over to a caretaker setup and subsequently a strong government be elected to brining political stability in the country which was the only way to bring economic stability.
He averred that right now, Pakistan was facing energy crisis, high inflation, depleting remittances while our exports have declined from US$3 billion to US$2.2 billion.
“On the one hand our exports and remittances were declining and on the other hand we were heading towards default; do they know what was happening to the economy? The government has no understanding of the economic situation nor has a roadmap to come out of the crisis,” he added.
He said spare parts businesses were already facing problems of getting Letter of Credits (LCs) from bank for imports and now the commercial banks were also rejecting LCs for the import of raw material. “In near future, for certain we will face shortage of various products and raw material for industries,” he added.
According to him, Pakistan’s projected inflows of dollars in the form of loans and foreign investment was not matching its projected outflows (debt servicing and foreign payments), hence the financing gap has exceeded US$10 billion, which was never seen by the country and we have become a high default risk country. Thus, the country was heading towards default.
He observed that the country was facing shortage of foreign currencies in the open market and thus the importers were forced to pay beyond the interbank rate to buy foreign currencies. “This was another form of default the country was facing right now,” he added.
He also pointed out that the markets’ and local business community’s trust in the government was at its lowest; former federal finance minister Miftah Ismail had lost the confidence of the markets and sees his replacement Ishaq Dar as a total failure “for showing non-serious approach to handling the fragile economy”.
“My sources in the finance department say that the government was waiting with an anticipation of receiving help from the International Monetary Fund and Beijing (China). However, this is not a prudent strategy to handle the economy; this will only lead to more inflation, more pressure on the rupee and more shortage of products in the country,” he added.
Copyright Business Recorder, 2022
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