Pakistan Economy Watch (PEW) on Sunday said that the world community should unite to counter threat of low oil prices, as it could bankrupt oil importing developing countries before the oil-rich nations paving way for another international crisis.
Pakistan should reduce expenditure, enhance exports and focus on value-addition as well as innovation, otherwise it would not be able to thwart default even with the help of International Monetary Fund, PEW President Dr Murtaza Mughal said in a statement here.
He said that according to experts, oil exporting countries were running large budget deficits while Saudi Arabia having over 700 billion dollars in reserves could default by 2020 if the prices of oil remained subdued.
Realising the threat, he said, all the oil exporting countries were cutting expenditure and subsidies, enhancing taxes, downsizing state-run and private organisations and planning to slap a tax on remittances, which was a threat for countries like Pakistan, dependent on workers' remittances.
Dr Mughal said that Pakistan's exports stood at 24 billion dollars, while imports were double than that and the deficit was covered largely by remittances, which were almost 19 billion dollars in 2015.
Workers were being fired in oil exporting countries, which would reduce remittances and increase unemployment as well as poverty in Pakistan, unleashing serious balance of payments crisis, he added.
Saudi Arabia, UAE, Kuwait, Qatar and Oman, he said, sold oil worth 500 billion dollars in 2013 and the figure had now slipped to 150 billion dollars. These countries would desire remittances worth 100 billion dollars in a situation where only Saudi Arabia was facing a deficit of 100 billion dollars, he added.
Pakistan, Dr Mughal said, received 30 percent of its remittances from Saudi Arabia, which was in deep trouble, therefore, policymakers should try to find out a solution before it is too late.