PIAF calls for solid economic plan as uncertainty continues to hit economy

ISLAMABAD    -   The Pakistan Industrial and Traders Associations Front (PIAF) has called for solid economic plan from all the stakeholders, terming the economic conditions as the uncertain one in view of deteriorating energy crises follow­ing the tough conditionalities of the International Monetary Fund (IMF), making this year more complicated and unstable for the economy.

The PIAF Chairman Faheemur Rehman Saigol said all political parties should provide their eco¬nomic stabil­ity plans to avert further losses and delays, warning that numerous global issues are impacting world economies. He said the government should priori­tise resolving the energy crisis by pro­viding sufficient and affordable elec­tricity and gas to industries.

He called for a fully-fledged and sound plan with a highly competent team to handle local challenges forth­with, but unfortunately, they have no solid plans or directions. He foresees the new fiscal year full of challenges for businesses and industries in Paki­stan due to political uncertainty on global and local fronts. The incumbent government should come up with dras­tic measures to give confidence to local industrialists-cum-entrepreneurs and foreign investors through industry-friendly and investment-friendly poli­cies. In this regard, the interest rate should be gradually reduced to boost economic activity and industrialisa­tion within the country.

The import bill should be reduced by imposing bans on luxury products. He highlighted controlling inflation to ensure affordable living costs for the masses and containing the cost of pro­duction for businesses at a local level. He pleaded for formulating economic plans aimed at reviving growth in large-scale manufacturing, small and medi­um-sized segments, the service sector, and exports. He stressed the need for a revisit of the economic policies, as the economic indicators throughout the year remained very depressed amidst high inflation, low exports, depleting foreign reserves and continued uncer­tain position of the local currency.

Faheemur Rehman Saigol said that almost all indicators of the economy continued to show poor performance, including high exchange rate, unprec­edented hike in markup rate, repeated increases in electricity rates, gas short­age, price spiral, mismanagement and bad governance, becoming the hall­marks of the government. The PIAF chief urged the policy makers to con­centrate on increasing tax-to-GDP ratio which was the lowest in Pakistan in the region. The PIAF leader warned if the government failed to take appropri­ate measures for economic revival, the trade and industry will face a complete shutdown, asking the government to convene a conference, taking the busi­ness community onboard.

He observed that besides increasing exports and controlling imports the government will have to take adminis­trative measures, as a large demand of cash dollars are seen in the market. He argued that this devaluation of the cur­rency was dictated by the IMF through prior actions and it has nothing to do with macro-economic fundamentals. He said that there was a complete break­down of economic policymaking, as the country’s fiscal policy had become subservient to monetary and exchange rate policies. He said that the monetary tightening and exchange rate deprecia­tion resulted in higher inflation, public debt and debt servicing. The empirical evidence showed that the one percent monetary tightening hiked the infla­tionary pressure by 1.3 percent in the case of Pakistan, he added. The govern­ment needs to devise a strategy on war-footing to increase foreign investment in Pakistan so as to stop the upward trajectory of the dollar, he added.