ISLAMABAD: Finance Minister Miftah Ismail Wednesday said the federal government will consider importing goods from India, as the cash-strapped nation looks for options to cushion the impact of the devastating floods.
The idea to import edible goods from India was first floated by the finance minister on Monday when the country’s death toll crossed 1,100 and hundreds of thousands of people were displaced and thousands of acres of crops destroyed.
In a statement on twitter, Miftah said more than one international agency had approached the government for permission to bring food items from India through the land border. “The govt will take the decision to allow imports or not based on supply shortage position, after consulting itscoalition partners and key stakeholders,” Miftah said.
Miftah’s statement comes after Prime Minister Shehbaz Sharif while speaking to the international media personnel ruled out the possibility of importing goods from India, reports Geo News.
“The PM virtually ruled out the possibility of vegetable imports from India to overcome shortages caused by the devastating floods, saying the two sides needed to talk about the human rights situation in India-held Kashmir.
Shehbaz, however, said he was ready to have a dialogue with Narendra Modi on the issue. Meanwhile, Federal Minister for Commerce Syed Naveed Qamar Wednesday said the government was importing onions and tomatos from Iran and Afghanistan, which would help stabilize their prices.
Talking to the media, he said the prices of onions and tomatoes had increased after the floods, says a news report. Naveed said floods had affected the supply chain of essential goods, which will take time to improve. He said the government was taking more steps to control food inflation.
The minister said in the current situation, the opposition should not politicize the International Monetary Fund (IMF) program. Anything that harms the IMF program will harm the country’s economy, livelihood and people of Pakistan, he said.
In response to the finance minister’s proposal, PTI Senior Vice President Fawad Chaudhry said his party will not let the flood emergency be an opportunity to open trade with India. Taking to Twitter, Fawad said the actions of Indian Prime Minister Narendra Modi were not only anti-Muslim, but also against the humanitarian values.
“Pakistan-India trade cannot take place with these actions in place. [We] strongly oppose such decisions. Loyalty with the blood of Kashmiris is a must,” he wrote. Minister for Planning Development Ahsan Iqbal told a UK-based international wire agency that 45% of the cotton crops had been washed away, while early wheat sowing in southern Pakistan had also been affected.
Moreover, many rice fields, as well as lands where vegetables and fruits are planted, have been inundated. Seasonal crops are critical to the economy, particularly cotton which makes up more than 60% of the country’s exports, according to the data of the finance ministry.
Arif Habib Limited in its report titled ‘Floods 2022 – Inundated with Economic Woes’, states that Pakistan has recorded the worst floods since 2010, with rainfall crossing 390mm this season. This is “three times higher than the national 30-year-average of 135 mm,” it adds.
The report further notes that the impact of the calamity is expected to last 30-45 days, while the rehabilitation process will take much longer. It also estimates around Rs1.2 trillion ($5.3 billion) in losses to the economy, which is around 1.48% of the gross domestic product (GDP).
AHL forecasts the GDP growth to shrink to 2.49% in the fiscal year 2022-23, against an earlier base case assumption of 2.97%. But a rebound is expected the following year with GDP to settle at 4.4%.
It calculated the current account deficit to grow by $1.98 billion, due to the import of food commodities and shrinking exports of textile, rice and sugar given the shortage in the country and inflation to witness further pressure this quarter, settling at 19.7% in the financial year 2023.
It also expects short-term demand to hit the cement, steel, automobile, oil marketing companies and fertilizer sectors. However, the majority of these sectors could likely benefit from the rehabilitation process.
Commenting on the possibility of importing from India, Dr Khaqan Najeeb, former advisor ministry of finance said regional integration could be thought of as a “public good” and the South Asia region could benefit from it.
“Thinking about India-Pakistan, there are good economic grounds to think of the two nations moving on bilateral trade,” he said. The former adviser added that at this time when a big chunk of crops have suffered due to floods it may help to especially consider the import of tomatoes, onions and greens and maybe wheat later on to ensure enough supply and price stability in the country.
