Former Federal Board of Revenue (FBR) chairman Shabbar Zaidi said on Saturday that Pakistan needs critical restructuring including wrapping up of free trade agreements (FTAs) with China, Turkey, Vietnam, Thailand, Malaysia and Sri Lanka.
“Current account deficit will persist until the FTAs are in place,” said Zaidi while speaking at an event in Karachi. “These FTAs are useless for Pakistan.”
Zaidi stressed that the China-Pakistan Economic Corridor (CPEC) should be rolled back and the government should promote regional trade to deal with the economic issues.
He recommended imposing a 10-year economic emergency in the country and keeping the policies remain for that period to gain confidence of investors.
The real problem of Pakistan is the economic well-being of masses, he said adding that “Pakistan is not in danger, the state is.”
“A ruse of a threat to the country has been created to confuse the nation about what the real issues are,” the former FBR chairman said.
On the occasion, former State Bank of Pakistan (SBP) governor Dr Ishrat Husain said that lack of consistency in policies shattered the confidence of investors in Pakistan.
“No businessman, local or foreign, will invest if he does not know whether he will earn on the investment or not,” said Husain. “There is no continuity, predictability or consistency of policies in Pakistan.”
He also pointed out that Pakistan had an elitist economy and few quarters had vested interest in the current state of affairs.
He was of the view that Pakistan will not default like Sri Lanka primarily because of differences in the debt carried by both nations.
“Of the total debt, Sri Lanka has 50% short-term obligations while this number for Pakistan is just 14%,” the former SBP governor said. “Debt is not something that should be detested.”
Giving an example of the sunny side of debt, he added that if the country took loan at 10% interest and earned 15% return on it, then it made 5% more money.
He opined that the prime problem of Pakistan is that the debt is not invested properly and the cost is higher than the return earned by the country.
Husain underlined that Pakistan did not have steel, aluminium and plastic industries therefore its imports remained on the higher side.
“The masses have largely been ignored and taxpayers have been overburdened,” he said.