KARACHI: In the midst of rising political temperature in the country, the Pakistan Business Forum (PBF) has proposed a dialogue among all political forces to work out guidelines for political and economic stability in the country.
Vice President of PBF Chaudhry Ahmad Jawad said that such a move will help Pakistan make progress and improve the lives of its masses. The time is ripe for a dialogue aimed at fostering an agreement among ‘political partners’ on a methodology to steer Pakistan out of the present economic crisis.
Speaking at a meeting of members of the PBF’s core committee, Ahmad Jawad said that intensified polarisation in the country would only weaken state institutions, as politics is not about excluding others but rather adhering to one’s own ideology.
“When we look back, we find that rather than getting better things have gotten worse. Economic growth still experiences ups and downs; we saw that particularly in the last 20 years,” he remarked.
He said the chances of economic stability were further clouded when it was reported that the country’s trade account recorded a deficit of $23 billion during the first nine months of this fiscal year, rated to be 83% of the annual target, because reduction in imports was offset by a deep decline in exports.
The reported gap between imports and exports was down $12.6 billion or 35.5%, on a year-on-year basis. It was pointed out that the annual export target was set at $38 billion but only 56% of this was achieved in the first nine months as the exports recorded in this period was just $21 billion down by $2.3 billion, or 10%, while imports amounted to $44 billion, down by $15 billion, or 25 per cent. “It is mentioned that though lower imports helped contain the current account deficit to around $4 billion but it has camouflaged the rapid deterioration in exports.”
Similarly, Pakistani exporters have failed to take advantage of the steep currency devaluation, thereby rendering the same unhelpful to the economy. On the other hand, the projected import target was around $65.6 billion by the end of the current fiscal year but currently it has come up to 68% of that target in nine months.
The difficulties caused by arbitrary controls over imports has depressed imports but now the IMF is exerting pressure on the State Bank of Pakistan to withdraw the repressive instructions and instruct the banks for priority allocation of dollars.
The economic managers of the country are, therefore, warned to resist pressures to depart from the current macroeconomic framework because any mistake at this point in time is going to exacerbate external and domestic financing risks and potentially place debt on an unsustainable path.
“The only way forward is sustained macro-fiscal and structural reforms so that fresh financing is made available along with reviving the private investor confidence,” he added.
Copyright Business Recorder, 2023