Pakistan needs a fresh loan from the IMF. It is essential to increase exports and substitute imports. Attitude of friendly nations is cold; larger tax base is needed.

(March-23-2024)

Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Saturday that taking a new long-term loan from the IMF is very important for the country’s survival. 

At the same time, economic reforms are significant so that the country can become self-reliant, and he said there is no need for further borrowing. 

Mian Zahid Hussain said that borrowing should be stopped as soon as possible; otherwise, the entire debt servicing burden will continue to be shifted to industry and the public. 

Talking to the business community, the veteran business leader said that the IMF is the only option to save the country from default. 

He added that due to our continuous breach of promises, the attitude of the IMF has become inflexible, while the attitude of the friendly countries has also become cold. 

The IMF not only wants the continuation of strict policies but also wants to see further increases in electricity and gas prices and prolong interest rates in double digits, he said. 

The IMF wants to increase the tax base, sell failed enterprises, and bring non-tax-paying sectors into the tax net. However, in Pakistan, governments generally cannot do anything other than increase taxes on certain items, resulting in inflation.

Increasing the burden on the powerful and influential classes has always been avoided, he said, adding that at present, the IMF is somewhat satisfied, due to which other creditors are also ready to trust Pakistan, but getting billions of dollars every year to repay old debts and interest is not sustainable. 

At the moment, both the government and the IMF are giving the good news of a slight reduction in inflation. Still, when electricity and gas become more expensive, the cost of production will also increase, which will not reduce inflation.

There is a clear possibility of a decrease in Pakistan’s exports, and the rich will be hardly affected by the austerity policy of the international organization. 

Prime Minister Shahbaz Sharif has indicated that the burden of reforms will now be shifted to the elite instead of people with low incomes, which is welcome. IMF and the people’s misery are linked because the economy does not flourish under its conditions; it shrinks. 

Therefore, we need to stand on our feet through structural reforms as soon as possible so that we do not need loans and some relief can be given to the people.  

He said that an increase in exports and import substitution is needed, and concrete steps should be taken instead of relying on statements.