(Sept 02, 2022)
Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Friday said the flood damage is ten times more than the IMF loan, but this time IMF is not ready to make any kind of concession.
The IMF is not in a mood to extend any help but it is determined to get its strict conditions imposed due to the trust deficit, he said.
Mian Zahid Hussain said that adherence to the IMF conditions will be a challenge for the government, while the non-cooperation of the two provinces may increase the difficulties.
Talking to the business community, the veteran business leader said that despite difficulties, Prime Minister Mian Shahbaz Sharif has announced the abolition of fuel adjustment charges on those who consume up to 300 units of electricity per month, which is welcome.
The government should also consider increasing the direct subsidy of Rs2,000 per month to Rs3,000 per month, he said.
The business leader said that there will be an enormous drop in demand because of floods, which will have the biggest impact on automakers, the tractor industry and steel manufacturers.
The impact will also be felt gradually by the other sectors as well. Initially, the construction industry will suffer a lot, but with the start of reconstruction, this industry will start to recover.
According to the IMF, Pakistan’s growth rate is expected to be three and a half percent this year, while inflation is expected to remain at twenty percent.
The flood has swept away over five thousand kilometres of roads, bridges, small dams and railway lines, the restoration of which is impossible without foreign investment in the current economic conditions, he observed.
Mian Zahid Hussain said that because of the destruction of the roads, companies are facing great difficulties in transporting their products from one place to another, which is affecting the overall situation.
Agriculture is the first sector to be affected by the floods, after which big industries have suffered, but small industries, general businesses and services will not be spared.
Mian Zahid Hussain added that during the outbreak of the Coronavirus, developed countries and international institutions gave trillions of dollars in aid to large multinational companies, which increased the capital in the market resulting in inflation.
The whole world is suffering for years due to inflation therefore, these institutions have become cautious.