(September 18, 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 Wednesday said the crisis in the middle east can destabilize the whole world if it is allowed to continue. It can also wipe out all the gains achieved by Pakistan on the economic front as an attack on the most important oil facility in the world is being dubbed as 9/11 of the energy world, he said.
Mian Zahid Hussain said that attack on Saudi oil facility has disrupted five percent supply but prices jumped 19.5 percent and if tensions continued it can result in a global crisis.
Talking to the business community, the veteran business leader said that Saudi oil production has been reduced by 5.7 million barrel per day while the kingdom has not announced any date for resumption of operations which has added to the anxiety.
The former minister noted that tensions can hit oil importing countries hitting their Forex reserves, import bill, balance of payments, prices and currency. He said that an increase of five dollars in the oil price will increase the oil import bill for Pakistan by 1.25 billion dollars as our 26 percent imports are oil-based.
The veteran business leader said that tight monetary policy and other initiatives have reduced the current account deficit by 73 percent, foreign exchange reserves have been stabilized, number of filers has jumped to 2.5 million, energy theft has been reduced, imports are going down while exports are gaining momentum which can be reversed. The defense budget saw a freeze but non-developmental expenditure has not been capped while tax collection has been improved, he added.
Mian Zahid Hussain said that bleeding companies should be sold, harassment of the business community should be stopped, circular debt has touched the mark of Rs 1.7 trillion while monthly Rs 38 billion is adding in it which is a threat. He said that IMF’s delegation has arrived but the government should not accept any new conditions as masses and business community cannot take more punishment. Laudable steps have not been taken to boost exports which will keep the economy in ICU unless exports are increased by ten billion dollars.