Turning around the economy is possible. But to achieve this difficult goal, the government must chalk out an economic agenda with a clear cut system of implementation. These views were expressed by former PIAF Chairman Irfan Qaiser Sheikh while addressing a business gathering held here at the Lahore Chamber of Commerce and Industry (LCCI). He underlined that no measures would work until and unless the issue of energy was resolved. The country had to utilise indigenous resources to overcome the energy shortage. He said that the option of importing electricity could be considered as a stopgap measure but had to be followed up by more robust options.
The former PIAF chairman said that there are certain economic issues including low growth rate, high inflation, rising unemployment, fiscal indiscipline, poverty, surging food and energy prices, expensive credit, alarming increase in government borrowing, circular debt, poor revenue collection coupled with increased spending, and low foreign investments and above all low tax-to-GDP ratio which will continue to hinder any effort to kick start the economy. He said that industrial degradation due to unavailability of gas is not only jacking up unemployment but it has also hitting exports hard and creating a precarious security situation as well.
Therefore, for keeping industrial wheel turning, there needs to be careful evaluation of the problems by the government of tackling the issues faced by the people. Sheikh noted that the Federal Board of Revenue had failed to play a constructive role and should either be restructured or be manned by people understanding of the ground realities. Under-invoicing and smuggling should be treated as criminal offences and those apprehended should be given exemplary punishment. He said that banking sector is making huge profits at the expense of trade and industry and that the State Bank of Pakistan must take notice of this situation.
He said that cheaper availability of money to the business community is one of the prerequisites to breaking out of the economic morass. He said that high markup rates are another area where the concern of the authorities is required. He claimed that markup rates in Pakistan are higher than in other countries of the region. He alluded to the fact that the interest rate in US is 0.25 percent, in UK 1.5 percent, in Canada 1.5 percent, in Australia 4.25 percent, in Japan 0.1 percent, in China seven percent, in India 11.5 percent, in Bangladesh 12.5 percent and in Sri Lanka 9.75 percent.
