The All Pakistan Business Forum has asked the government to debate the matter of financial assistance from the International Monetary Fund in the parliament to evolve a firm policy to ensure judicious use of the amount of the IMF loan.
APBF Chairman Nabeel Hashmi, reacting sharply to the $6.7 billion International Monetary Fund loan to Pakistan, said it would bring fresh wave of price-hike.
He said the people would not benefit from the IMF loan as the rulers would continue lavish spending. He also lamented the rulers were not bringing back their money kept in the foreign accounts.
Hashmi said the IMF loan would have devastating effects on economy, as with more taxes, increased rates of utilities and cost of production would further increase. This will render the Pakistani exports non-competitive in the globalised competitive environment, he feared.
Being perturbed at the new so-called business-friendly government’s deviation from its election manifesto, Nabeel Hashmi said this was not what the PML-N had promised to the people of Pakistan. The IMF conditions had already been implemented in the budget including power tariff hike, raise in petroleum prices, gradual end of subsidies, raise in sales tax, cut in fiscal deficit, improvement in tax-to-GDP ratio, enhancement in tax net and restructuring and privatisation of public sector enterprises.
He argued that policies dictated by the IMF were not always suitable for the situation of the country. He argued that there were several examples of how the IMF failed to understand the dynamics of the country that they were dealing with.
Reacting to the constant hike in power as well as gas rates, Hashmi asked as to how the new government of the PML-N could control the extortion mafia when the authorities themselves collecting ‘bhatta’ from the poor masses in the shape of exorbitant jump in electricity and oil prices.
All Pakistan Business Forum President Rashid Mehr said the government had no other option but to approach the International Monetary Fund to control its fiscal imbalances, which the country had been facing due to dwindling foreign reserves, balance of payment crisis, weakening exchange rate and financial mismanagement during the last five years.
“However, this is a short-term solution and borrowing a long-term loan from the IMF is not the most viable and rational option for any country,” he warned.
Rashid Mehr said with a view to bridge financing gap of $5-6 billion, there were different medium-term solutions to fill up this gap as the new government would have to generate non-debt inflows such as foreign investment and remittances or cut down trade deficit by boosting exports and reducing imports. He said no IMF bailout package had ever been successful since 1988 due to lack of fiscal management and any solid structure for repayment.
The APBF president said the fast rising up graph of inflation and law and order situation in parts of the country had already put the industrial sector in deep troubles therefore the government would have to come up with out-of-the-box solution to expedite economic activities in the country.
