Only an IMF loan can save a country from default. Economy will crumble if imports are not controlled. Oil subsidies equal to defence budget.


(May 20, 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 deadly combination of political and economic instability is destroying the economy.

Successful negotiations are necessary as the country will go bankrupt if the IMF loan was not received immediately, he said.

Mian Zahid Hussain said that a government which is in power for a few months cannot save the economy as an absence of political stability is very dangerous.

Talking to the business community, the veteran business leader said that political stability is necessary to save the country, for which the ruling coalition must be provided with an environment for difficult decisions.

He said that elimination of wastage of resources, abolishing tax concessions, sale of loss-making enterprises, reforms in the power sector, reduction in non-development expenditure, and complete elimination of policies promoting the elite are necessary to save the country.

He said that controlling imports and obtaining loans from the IMF are very important issues that need to be addressed. At present, Pakistan is the only oil-importing country which is giving subsidies of Rs45 on petrol and Rs80 on diesel, the total volume of which is equal to the defence budget which is not sustainable.

Mian Zahid Hussain said that the stock market has been steadily declining, the rupee has depreciated sharply while the appreciation of the dollar may significantly increase remittances and exports from Pakistanis.

In the case of sales tax and customs duty, an additional tax of about Rs300 billion will be collected which should be used to provide targeted subsidies to the vulnerable.

Mian Zahid Hussain further said the government should consider increasing allocations to the BISP to save the poor from price shocks.

He said that the previous government had caused irreparable damage to the economy by delaying the IMF program in 2018 and bad governance despite political stability in the country.

The previous government was called inexperienced by the opposition and economists, now we have experienced leaders in the government but it is not being allowed to function and its immediate election is being demanded.

The ruling circles need to understand why a government that is in power for a few months will tarnish its image by making tough decisions.