(1 August, 2018)
President Pakistan Businessmen and Intellectuals Forum (PBIF), President AKIA, Senior Vice Chairman of the Businessmen Panel of and former provincial of Mian Zahid Hussain on Wednesday said to get maximum out of the growing global economy, Pakistan need to focus on developing investment opportunities, export enhancement, reduced expenditures, increased productivity and major reforms in economic and financial institutions.
The veteran business leader while talking to the business community said that Pakistan’s current account deficit has reached $ 14 billion which foreign reserves with the State Bank are only $ 9.6 billion, hardly sufficient for the two months’ import bills. PKR has been devalued by 20 percent since December 2017, which has not only increased the prices of imports including industrial raw material, petroleum products and other but the financial position of the Country to acquire defence equipment and machinery has also weakened which may be dangerous for the Country’s defence.
The former minister said that apparently it seems unavoidable for Pakistan to get into a new IMF program however, Pakistan has extended no formal request neither had any discussion in this regard with the Authority. Eventually, US Secretary of State said that US will closely monitor the IMF loan not to be used for paying off the Chinese debts and will ask IMF not to give loan if Pakistan intends to pay off the Chinese loans through IMF program. In response to this, Chinese foreign office spokesperson said that IMP is an autonomous body having its own rules and procedures and they believe that it can tackle the Pakistan’s new IMF program efficiently without any dictation from the US.
Mian Zahid Hussain said that according to Financial Times report, ministry of finance is in process of preparation a brief for the expected incoming Prime Minister Imran Khan to avail a $ 12 billion new IMF program, while total finance requirement for the current year is $ 25 billion. China has provided financial assistance of $ 6.5 billion in the last fiscal year and $ 2 billion soon after the election but it may not suffice the Country’s need. Only 40 percent of Pakistan’s’ financial needs can be met through Chinese assistance, for remaining portion Pakistan will have to look other options. If the foreign reserves go down below the limit of two months’ import bills not trilateral financial institutions including WB and ADB will not provide loan to Pakistan and will lead the Country with no option except IMF program on strict conditions. The incoming Government must introduce economic reforms and measures to increase foreign remittances and enhanced exports.