KARACHI: The Pakistan Business Forum (PBF) has demanded the government to issue 15 percent rebate for a period of one year for ongoing and scheduled export orders to help increase the country’s exports.
PBF Vice President and Chief Organiser, Chaudhry Ahmad Jawad stated the government should focus on increasing inflows of the dollars, particularly from exports and remittances, the forum demanded in a statement.
He said the country’s economy was still in dire condition since January 2023 and the government must announce a clear policy on the rupee to facilitate traders and industries. He was of the view that 15 percent rebate for a year could help the exporters fetch foreign exchange in the country.
Jawad lamented that Pakistan’s exports were declining, while its neighbouring country Bangladesh was making the most of its exports sector.
Bangladesh’s Ready-Made Garment (RMG) sector exports witnessed a growth of 16 percent year on year basis by exporting RMG worth $18.33 billion, as compared to $15.86 billion in 2022/21. On the other hand, Pakistan’s textile sector witnessed a substantial decrease in exports, not a consistent incline according to the PBF.
He further noted that industrial and agricultural production, and other targets set by the government had been shredded. “All the figures have gone haywire.”
The PBF also showed concerns over devaluation of the rupee and asked government measures to stop speculative trading.
“PBF believes that the Real Effective Exchange Rate (REER) of the dollar against the rupee is less than Rs250 for a dollar at the moment, and that the current depreciation cycle is a direct result of speculative trading, lack of regulatory oversight, and mismanagement of the forex market,” said Jawad.
Even bond and currency markets were pricing in high over consistent un-certainty of the country economic picture, he added. “Since 2022 to till date the PKR currency is one of the worst performing in Asia.”
PBF Punjab chairman Muhammad Naseer Malik said the major issue was to arrange external funding to meet foreign outflows at a time when the central bank’s reserves were with an import cover of only two to three months against the minimum required standard.
Due to prevailing high yields, the international Sukuk and Eurobond market couldn’t be tapped, which had been earlier targeted at $2 billion, he maintained.
“IMF’s SBA review is still pending, which is very critical for the disbursement of $1 billion and will subsequently simplify acquiring additional funding from other multilateral and bilateral lenders. For now, however, these uncertainties are building immense pressure on the FX reserves and currency,” he explained.
PBF Balochistan chairman Engr Daroo Khan Achakzai said the government needed to focus on the inflow of dollars, particularly via exports and remittances to minimise the current account deficit.
He stated that he hadn’t seen the current level of instability and fluctuation in the money market before. “How can anyone inject capital into such an uncertain market,” asked Achakzai, adding, “We are very worried.”
PBF Secretary General Punjab, Arif Ehsan Malik also called upon the government to rescue the economy, saying businesses were struggling to absorb a growing taxation pressures amid surging input costs.
“Pakistan has serious, long-term structural economic problems, and the cost for this year’s devastating floods will be in the tens of billions of dollars. Rebuilding the destroyed infrastructure will be impossible for a country that is already heavily indebted, desperate for an IMF bailout and begging for financial assistance from the world community,” Wattoo added.
Arif Malik asked the government to make adequate measures through law enforcement agencies to stop smuggling of dollar to Afghanistan and also give incentives to expats so that banking transactions atmosphere could flourish.
Copyright Business Recorder, 2023