LAHORE: The business community on Saturday has welcomed government’s successful negotiation of a $ 3 billion deal with the International Monetary Fund (IMF).
The Federation of Pakistan Chambers of Commerce and Industry President Irfan Iqbal Sheikh said agreement with the IMF will determine the correct direction of the country’s economy.
The FPCCI president thanked Prime Minister Shehbaz Sharif for securing this long awaiting and crucial agreement. He was of the view the IMF deal would prove to be a big gift for stability of the country’s economy.
The President of the Lahore Chamber of Commerce and Industry Kashif Anwar, extended his congratulations to Prime Minister Shehbaz Sharif, Finance Minister Ishaq Dar, and the Ministry of Finance for their successful negotiation of a $ 3 billion deal with the International Monetary Fund (IMF).
Kashif Anwar emphasized that while the funds may not be disbursed all at once, the agreement would dispel speculations of a potential default, thereby putting an end to the detrimental effects of rupee devaluation, brain drain and Capital drain.
In light of this positive development, Kashif Anwar urged the authorities to focus on two key areas for economic reform. Firstly, he called for efforts to expand the tax base, which would increase the government’s revenue and contribute to overall economic stability. Secondly, he stressed the need to address the disparity between the rates of the US dollar in the open market and the interbank market. This discrepancy has created challenges for businesses and has had a negative impact on the economy.
Expressing his opinion on the ideal exchange rate, Kashif Anwar suggested a range of 175 to 200 rupees per dollar. He argued that such a rate would have multiple benefits for the economy. Firstly, it would help to reduce inflation, which has been a pressing concern in Pakistan. Secondly, it would contribute to lowering the high interest rates, which currently stand among the highest in the world. This reduction would not only alleviate the burden on borrowers but also make the cost of doing business more affordable.
Kashif Anwar further elaborated on the potential positive outcomes of this exchange rate adjustment. He explained that it would lead to a decrease in the cost of imported goods, particularly fuels and raw materials. This, in turn, would have a cascading effect on the prices of finished goods, resulting in a more affordable and competitive market.
Moreover, Kashif Anwar highlighted that a favorable exchange rate would alleviate the strain on businesses by reducing their dependence on imported resources and increasing their ability to rely on domestic alternatives.
President LCCI also emphasized that the successful IMF deal would enhance the trust and confidence of other donor agencies and financial institutions. This, in turn, would open up opportunities for increased funding for Pakistan’s development projects.
Kashif Anwar noted that the inflow of funds from these institutions would play a significant role in accelerating the country’s economic growth and development.
In light of these significant developments, Kashif Anwar called upon all political parties in Pakistan to set aside their differences and sign a charter of economy. He underscored the urgency of this action, emphasizing that it was crucial to break free from the recurring financial challenges that have hindered the country’s progress.
Kashif Anwar urged political leaders to unite in their commitment to long-term economic stability and growth, transcending party lines for the greater benefit of the nation. The Lahore Chamber of Commerce and Industry remains optimistic about the potential for Pakistan’s economic stability and growth in the wake of the successful IMF deal. Kashif Anwar reiterated the importance of implementing necessary economic reforms, addressing the exchange rate disparity, expanding the tax base, and fostering unity among political parties to navigate the country towards sustainable economic development.
As Pakistan stands at a critical juncture, the successful conclusion of the IMF deal serves as a stepping stone towards overcoming financial challenges and realizing the country’s economic potential.
With concerted efforts and a collective commitment to reform, Pakistan can look forward to a brighter future marked by increased economic stability and prosperity for all its citizens.
Meanwhile, SAARC Chamber of Commerce and Industry former president Iftikhar Ali Malik said much needed IMF bailout package will help implement structural reforms, reduce fiscal deficits, control inflation, and facilitate the balance of payments besides stabilising the economy and improve its long-term prospects.
In a statement issued here, Iftikhar congratulated Prime Minister Shehbaz Sharif and Federal Finance Minister Ishaq Dar for making best possible efforts to secure the much delayed IMF programme aims to address economic imbalances, strengthen the fragile economy, and restore investors’ confidence.
He said increased foreign exchange reserves provides a boost to Pakistan foreign exchange reserves which he added can help restore confidence in the country’s ability to meet its international obligations and provide a buffer against external shocks.
He said IMF programmes will help implement structural reforms in areas such as taxation, public expenditure, financial sector, and governance. These reforms aim to address deep-rooted economic issues and can have long-term benefits for the economy, he added.
Iftikhar Ali Malik also expressed his highest degree of gratitude to our time tested friends of all seasons China, Saudi Arabia, United Arab Emirates and Islamic Development Fund help steer Pakistan out of turmoil at the time of massive economic challenges.
He said the PM visionary approach and wisdom played key role in mustering the support from friendly countries to get through IMF deal.
He said now it’s high time “PM Economic Revival Plan” must focus on unlocking their strategic potential in agriculture, mine and minerals, defence production and information technology in addition to attracting foreign investments of billions of dollars and create job opportunities for millions people, he concluded.
Copyright Business Recorder, 2023