Economic challenges: No quick-fix solutions, says Dar

KARACHI: Finance Minister Ishaq Dar has said it will take some time to set the economy on the right path in the face of gigantic financial problems. Talking to a delegation of the Karachi Chamber of Commerce & Industry (KCCI) here on Saturday, he said: “There’s no quick fix, and it will take time as we had faced such challenges in 1998 and 2013; but all of those challenges were efficiently tackled in due course of time.” According to a statement issued by the KCCI, the minister said that in 2017, everyone was applauding Pakistan’s performance, and the economy was performing at its peak with the highest foreign reserves and lowest inflation. “The stock markets were the best-performing markets of the region,” he claimed, adding that Pakistan was going in the right direction but the political instability destroyed everything, plunging Pakistan’s economy from 24th position to 47th position in 2022, which was painful for all Pakistanis.

“The most difficult reforms have been done and the bleeding is over. Pakistan will survive and we will collectively face all the challenges to put the country back on track, leading to progress and prosperity,” Dar said, adding that it was the government’s top priority that no delay occurs in external payments and the same was promptly being done. “I reassure you that we will come out of economic crises and come up with new ideas and initiatives which the country actually deserves through agricultural revolution and a special focus on IT.” He said the government would fully cooperate with the business community by accepting all their reasonable demands, but the wish list should be kept limited.

He assured the business community that the government would do everything possible to support the business and industrial sector through ‘Ease of doing business’ so that economic growth and stability in the country could be ensured.

“The government will put forward a business- and people-friendly budget for the fiscal year 2023–24,” he announced. The finance minister, while praising the KCCI budgetary suggestions, underlined the government’s resolve to address the problems being faced by the business and industrial community. He said that the country was facing severe crises but the government simply could not be held responsible, rather should be appreciated, for taking responsibility for fulfilling all the international commitments, violated by the previous government.

“The government has been trying in most difficult conditions to fulfil all previous commitments to save Pakistan’s credibility, which is the basic reason why the business community and the common man are finding themselves overburdened due to exorbitant electricity and gas tariffs along with general inflation. In a fresh salvo directed at former finance czar Miftah Ismail, Ishaq Dar said those predicting Pakistan’s default should be “ashamed” of themselves. He said the government had taken several measures to stabilise the economy. “What happened in the past has badly affected Pakistan’s reputation. However, the government is doing its best. We are well aware of the burden being put on the business community and the common men.”

While speaking about the delay in the IMF programme revival, which he called “unprecedented”, Dar noted that there’s no technical reason for it. “Our top priority is to ensure all sovereign commitments are made on time and there must not be a delay even for a day. And it didn’t happen. But some people have this habit of giving dates of Pakistan’s default. I have been hearing that for the past year.”

A visibly angry Dar said, “They should be ashamed. You should be well-wisher of your country and you should be loyal to your soil.”

Ishaq Dar, however, rubbished the claims that the country would default and admonished the former finance minister without mentioning his name. “Rather than giving people hope and giving them confidence, now there’s a new prediction for default in October.

“I assure you Pakistan is a sovereign country. Pakistan has trillions of dollars of assets. If we have external debt of 100 billion dollars then we have assets as well. We don’t need to worry. This shall too pass,” he added.Chairman BMG Zubair Motiwala said the KCCI was well aware that the government faces fiscal issues, hence, the chamber’s recommendations have been compiled in such a manner that these would not require fiscal space. “Our recommendations are mostly pertaining to efficiently dealing with those hurdles which are hindering trade and economic growth and paving way for corruption.” He said that the foreign exchange held by the State Bank exhausts in imports of food and essential items and no funds are available to facilitate the imports of plants, machineries and spare parts etc. which needs to be addressed as it terribly affects the industrial production.

Highlighting several problems being faced by importers of raw materials and machineries, he stressed that a clear-cut policy has to be defined for clearance of payments against imported consignments while the banks must also be strictly regulated by SBP as it has been observed that bank were arbitrarily clearing import documents as per their wish and whim instead of merit. He said that the CNIC [computerised national identity card] numbers of unregistered buyers, provided by registered seller/ supplier must be treated at par with STRN. “Three per cent further tax on supplies to unregistered buyer should not be charged, if the CNIC number is provided by registered seller in Sales Tax returns. This issue has been pending for many years and should be resolved in this year’s budget,” he added.

Motiwala said that the buyers of Pakistani goods were shifting their orders to regional competitors including India and Bangladesh. “The government has to see that Bangladesh exports have risen by US$5 billion and ours have gone down with similar numbers which clearly shows how speedily we are giving away our exports share to rivals.

“The recession in the UK and the US was unlikely to have any impact on our exports as, being low-end suppliers, we do not fall in that recession bracket, but the core reason for losing exports in these important markets can only be attributed to high cost of doing business which must be brought down at par with Bangladesh and I assure you that we are capable enough to export even more than what Bangladesh exports,” added the chairman BMG. Minister of State for Finance & Revenue Dr Aisha Ghous Pasha and others were also present.