Businessmen Panel Secretary General (Federal) and former chairman of FPCCI standing committee Ahmad Jawad said urged Prime Minister Imran Khan to introduce internal tax reforms to increase revenues and close those government departments rendered dysfunctional after the 18th amendment. He also proposed effective privatisation rather than looking towards international agencies.
BMP official noted that as an opposition party leader Imran Khan was quoted as saying that increasing dearness instead of going for reforms was the easiest way for the government. He said the country went for the massive devaluation up to 32 percent and further speculation had it that our trade deficit would go up to $ 19 billion but country exports were not increased.
"Hence, people of Pakistan now ask the government where we went wrong in last nine months," he said, adding that in the last nine months, devaluation hit foreign direct investment and also shattered the confidence of the local investors. He said now it is written on the wall that the business community shouldn't expect concrete relief in the coming budget because it would be a budget based on IMF terms and conditions.
Jawad also said that it is an irrefutable reality that things had not gone the way the government promised and the poorer section expected from the proponents of change for the better. Increase in oil prices and hike in the tariff on gas and electricity and their impact on other areas has made life of the people miserable. He said the repeated claims by the prime minister and his team that things would take a turn for the better in the near future do not seem to be as much credible as they would like the people to believe.
He said the IMF Package would starve the country's economy while additional Rs 700 billion rupee taxes and revising the tariffs of electricity and gas from 1st July would be a tsunami for public and Industry at large. BMP leader said the bailout size of about $ 9 billion from IMF would be the highest loan by any Pakistani government in its history. He said there is nothing wrong in seeking loans from international agencies provided they are productively invested and masses may see a positive change.
"Unfortunately, the loan is being sought to actually repay the previous loans and for off-setting the negative fallout of the current account deficit," he said, adding that fulfilling IMF obligations would also require deep expenditure cuts without which the burden would fall on revenue mobilisation which would entail substantial hike in taxes in the short term.
He said there is no escaping this reality now, the biggest priority worth holding would be to protect the poor and vulnerable from the impact of this adjustment. Jawad said Egypt is the latest example for our policy makers since Egypt completed IMF package according to their terms and condition and still Egypt government faced structural issues in their system and their economy yet to take off.
He said it is proved that IMF package is not an answer of our economy and it is unfortunate that every government in Pakistan began their economy through IMF package. "One should know IMF is heavily dominant under US Department of Treasury and US is the major contributor too," he said, adding that PTI government was lucky that they managed around $ 10 billion deposits from China, UAE and Saudi Arabia in its first nine months and it was a handsome amount. However when it comes to Pakistan, he said, we see an interesting trend with the IMF programmes: they are becoming longer and larger.
"Longer means the pay-out period is increasing. For example, between 1958 and 1977, all the programmes were of one year. Coincidentally, all the IMF programmes in this period were also bail-outs or stand-by agreements. There were a total of seven programmes," he cited.
He further compared that between 1980 and 1995, Pakistan had been part of another seven programmes and all but one was between one and two years long. Between 1997 and 2013 - when the PML-N took out the last $6.4 billion loan - there were a total of six programmes. With the exception of one, all of them were approximately three years long. BMP leader said this would be the 13th time Pakistan seek IMF bail-out and overall it would be the 22nd loan taken from the IMF.
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