The Lahore Chamber of Commerce and Industry (LCCI) on Thursday sent an SOS to the State Bank of Pakistan pleading it to save the national economy and industry by bringing its policy rates to single digit reducing it by 250 to 300 basis points.
LCCI President Irfan Qaiser Sheikh said that in any country where the economy was facing a recession, the interest rates were brought down to stimulate growth, whereas in Pakistan it was the other way round. In the last two years interest rates in Europe and the United States had been brought down close to zero to save the economies from collapse. This is the time that interest rates should be brought down to single digit to spur growth.
The LCCI President said that a cut of 50 to 100 basis points would not be doing any service to the dwindling economy, adding "it was very unfortunate that we have failed to learn any lesson from the tighter monetary policy stance adopted by the State bank of Pakistan in the yester years."
He said ongoing economic scenario showed that there was hardly any time left for economic managers of the country and they all should understand the gravity of the situation that there would be no business community buyer if the interest rates were kept higher.
Irfan Qaiser Sheikh said it was now before all of us that high discount rate was no more sustainable, adding it had been causing a great harm to economy and would continue to do so unless and until a realist approach was adopted.
He said the SBP should understand that its continued tighter stance was inflicting a very heavy loss on the nation as the economy had already paid a very high price because of high interest rate.
He said the President of Pakistan had assured him that while evolving all the future economic policies, the private sector in general and the Chambers of Commerce in particular would be taken on board.
He reminded the policy makers that the private sector was the only hope for salvaging the country from a total economic collapse therefore a significant cut in cost of doing was direly needed.
Irfan Qaiser Sheikh said that in the last few years, the private sector had suffered set-backs because of higher cost of doing business. "Investment in new industrial projects and expansion in existing industry has come to a standstill. Massive flight of capital has taken place to other countries in the region where investment and business environment is favourable and future prospects are brighter.