Compliance with IMF conditions: HCCI chief warns of tough problems ahead

HYDERABAD: President of the Hyderabad Chamber of Commerce and Industry (HCCI) Adeel Siddiqui has said that problems being faced by industrialists and businessmen will be compounded further once the country starts complying with the conditions of International Monetary Fund (IMF).

He said that Prime Minister Shehbaz Sharif has announced his decision to comply with the conditions of IMF regarding withdrawal of subsidies on utilities and other stringent economic measures, adding that the steps would compound the severe problems already being faced by various sectors.

Speaking at a press conference at the offices of Jamshoro Chamber of Commerce and Industry, he said that inflation had reached 24.5 percent by December and after complying with the IMF’s conditions matters will become worse in the next three months as the rate of unemployment will increase. This may not go down well with the public.

Adeel Siddiqui appreciated the PM’s initiative for provision of subsidised loans to the youths as they would benefit greatly from the scheme, but said it should be backed up by merit to ensure that only genuine entrepreneurs get loans.

He said the country’s policymakers must understand how the economic conditions have come to such a sorry pass. “We are purchasing crude oil to produce energy. Sixty-five to 70pc of the crude oil goes into energy production,” he observed, and said that had energy production been achieved through renewable sources $12 billion to $15bn would have been saved annually.

He said the Jheeruk and Gharo wind corridor has the potential to produce 50,000MW of power but currently only 1,500MW is being produced and that also through 28 projects. He said that 30 projects were in the pipeline but even after those projects come on line the total production will rise to 3,000MW, which is still much below the total potential.

Letters of credit are not being opened because of scarcity of dollars and the government may cut LCs’ ceiling, he said. He, however, regretted that the government was largely silent over the economic conditions as not a single minister or parliamentarian was speaking on the matter.

“We are being economically murdered. The government must understand that industry cannot be closed as this will lead to a deluge of unemployment,” he said.

The HCCI chief said there is no raw material in the country and their rates have been increased manifold, be it copper or steel. The commodities sector was facing a similar situation.

Factories would face closures eventually as things had been delayed for too long. He asked the government to take a decision on LCs’ opening quickly as any further delay would badly affect the supply chains.

He suggested that quotas could be introduced on LCs’ opening. He said that thousands of containers were stuck up on the ports due to the various bottlenecks.

The automobile industry, he said, has almost been closed as their LCs are not being opened for new imports. There is a flour crisis in the country which analysts like him had predicted in April last year.

Adeel Siddiqui pointed out that non-release of soybean containers stuck at the ports has caused a hike in price of poultry meat. Prices of pulses could touch Rs1,000 per kg in Ramazan.

Copyright Business Recorder, 2023