The Lahore Chamber of Commerce and Industry Thursday sent an SOS to the State Bank of Pakistan pleading it to save the national economy and industry by bringing its policy rates to single digit reducing it by 250 to 300 basis points. In a statement issued here, the LCCI President Irfan Qaiser Sheikh said that in any country where the economy is facing a recession, the interest rates are brought down to stimulate growth, whereas in Pakistan it is the other way round. In the last two years interest rates in Europe and the United States have been brought down close to Zero to save the economies from collapse. This is the time that interest rates should be brought down to single digit to spur growth. The LCCI President said that a cut of 50 to 100 basis points would not be doing any service to the dwindling economy. He said that it was very unfortunate that we have failed to learn any lesson from the tighter monetary policy stance adopted by the State bank of Pakistan in the yester years.
Irfan Qaiser Sheikh said that ongoing economic scenario shows that there is hardly any time left for economic managers of the country and they all should understand the gravity of the situation that there would be no business community buyer if the interest rates are kept higher. Irfan Qaiser Sheikh said that it is now before all of us that high discount rate is no more sustainable. It has been causing a great harm to economy and would continue to do so unless and until a realist approach is adopted. The LCCI President said that the State Bank of Pakistan should understand that its continued tighter stance is inflicting a very heavy loss on the nation as the economy has already paid a very high price because of high interest rate. The LCCI President said that he, in his meeting with the President of Pakistan Asif Ali Zardari last week in Lahore, had categorically emphasized the need for cut in markup rate by reducing the banking spread which is at 8% presently, the highest in the world. also requested him to help bring down the highest ever interest rates in the country if the present government was interested in seeing industrialization in the country.
Irfan Qaiser Sheikh said that the President of Pakistan had assured him that while evolving all the future economic policies, the private sector in general and the Chambers of Commerce in particular will be taken on board. The LCCI President reminded the policy makers that the private sector was the only hope for salvaging this country from a total economic collapse therefore a significant cut in cost of doing is direly needed.
Irfan Qaiser Sheikh said that in the last few years, the private sector had suffered set-backs because of higher cost of doing business. Investment in new industrial projects and expansion in existing industry has come to a standstill. Massive flight of capital has taken place to other countries in the region where investment and business environment is favorable and future prospects are brighter.