(May 13, 2019)
President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Monday said current account deficit is expected to reach sixty billion dollars by 2023. Moreover, forty billion dollars will be needed to service the debts by 2023 which boosts total requirement to $100 billion which is a third of Pakistan’s GDP, he said.
The Veteran Business leader while talking to the business community, said that tax measures and improved economic policies will not be enough to tackle the challenge and only option to deal with it is rescheduling the part of the debt.
He said that the government will not be able to cut its expenses, a cut on defence expenditure is out of question; therefore, the axe will fall on the tax system. The government has no option but the swallow the bitter pill of imposing a tax on agricultural income, property sector, stock brokers, professionals, wholesalers and retailers.
The former minister noted that the former governments have promised the IMF to sell the bleeding enterprises wasting trillions but never honored them but now the government cannot afford the luxury of dole out billion to keep them afloat. He said that Pakistan is to pay almost $20 billion to China, Saudi Arabia, UAE, and Paris Club which if rescheduled for five years will provide great relief.
On the other hand, multilateral institutions will not reschedule debt but due to IMF program these institutions will be willing to lend another $10 billion dollars. Fiscal Responsibility and Debt Limitation (FRDL) Act, 2005 has not served its purpose, therefore, an effective law should be introduced to deter rulers from irresponsible and hasty borrowings.