KARACHI:
Eminent industrialists have expressed serious concern about the ballooning debt burden of the country without any consistent economic policy, saying the government should work to promote local brands instead of asking for loans.
They urged the newly elected government to work seriously and sincerely in the larger interest of the countrymen. In this regard, policymakers must draw up economic and industrial policies and strategies while taking business leaders on board.
At a time when austerity measures are critically needed, the industrialists asked rulers and bureaucrats to relinquish their luxurious lifestyle including expensive vehicles, costly residences and other special privileges, which put an unbearable burden on the pockets of the poor.
Already, the total debt and liabilities of the country stand at Rs81.2 trillion while the debt owed to the International Monetary Fund (IMF) rose to Rs2.14 trillion by the end of December, according to the State Bank of Pakistan (SBP).
Expressing his views on the precarious economic situation of the country, Federal B Area Association of Trade and Industry President Syed Raza Hussain said the huge external and domestic debt was weakening Pakistan’s economy, resulting in negative impacts on businesses of different sizes as well as individuals from varying income groups.
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He underscored that the government should reduce reliance on external debt at the first place through containing imports with a strict control over unnecessary and luxury goods. On the other hand, it should promote local industries and small and medium-sized enterprises (SMEs) – termed the backbone of the economy – to meet the domestic demand for raw material and essential items from industries and individuals.
Long-term policies are required for the SMEs, industries and agriculture sector through creating investment opportunities for foreign and local investors. Besides, a customised financing scheme should be introduced at low mark-up rates to encourage businessmen to expand their businesses.
“The government should work on the broad theme of ‘Made-in-Pakistan’ to promote local brands across the country while also looking to explore various avenues to generate foreign exchange such as exports, remittances, foreign direct investment and other such sources,” he stressed.
Echoing similar views, Hyderabad Chamber of Small Traders and Small Industries President Muhammad Farooq Shaikhani said Pakistan was enduring a sluggish economic growth, escalating inflation, rising unemployment and the formidable burden of both internal and external debt, which surged significantly in recent years. “Pakistan has long been ensnared in a ‘debt trap’, exacerbated by the recent increases and the contracting economy, and as a result the repayment of debt and interest has become increasingly untenable,” he said.
Shaikhani recently wrote a letter to Federal Minister for Finance Muhammad Aurangzeb, where he gave suggestions for debt mitigation. “The government’s practice of taking loans from banks at an exorbitant 22% rate is tantamount to attempting to collect water with a sieve,” he remarked.
Shaikhani was of the view that lending conditions with huge interest rates were a source of discouragement for the investors and industrialists desiring to set up new industrial units. He called for creating a conducive environment and providing affordable loans to boost Pakistan’s exports. He also asked the government to collect data of small traders, farmers and daily-wage earners to formulate a consistent economic policy.
Published in The Express Tribune, April 7th, 2024.
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