(April 10, 2020)
FPCCI’s Businessmen Panel SVP, President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Friday said coronavirus can leave many developing countries bankrupt. Local current has lost eight points versus the dollar due to the pandemic which has raised concerns, he said.
Mian Zahid Hussain said that steps should be taken to stabilise exchange rates otherwise it will add to debt and inflation while the business community will find it hard to plan for the future.
Talking to the business community, the veteran business leader said that coronavirus reduced production, revenue and exports as demand in the export markets is at the lowest ebb.
The former minister noted that global demand for oil has been reduced by 20 percent, the price war between Saudi Arabia and Russia has damaged the economy of oil-producing nations from where Pakistan receives billions of dollars in the shape of remittances.
Pakistanis working in Arab and Gulf countries are losing jobs which can result in economic and social issues, he said, adding that the virus has frustrated policy of developing countries to lure hot money.
Foreign investors have pulled 83 billion dollars out of developing nations in the month of March which has put their currencies and forex reserves under pressure while Pakistan has also lost two billion dollars eroding rupee by eight percent. He said that many countries can go bankrupt if a global response was delayed as IMF has only one trillion dollars for the purpose, it has already wasted 57 billion dollars in an attempt to bailout Argentina and currently eighty countries are asking for money.
The indebted nations can only survive if their loans are rescheduled he said, adding that Pakistan should disregard IMF conditions to relax controls over productive sectors and announce relaxations like that of the construction sector. He said that an enabling environment should be provided to the business community which in turn will not disappoint the government and help it overcome the crisis.