Jang Economic Session: Growth linked to boosting exports, broadening tax net

LAHORE: The government has finally approached the IMF against its claim that it will not seek loan from the funding agency. Now it is need to know what the US will demand through the IMF loan and how it will assert its pressure on Pakistan with regard to Afghanistan.

These views were expressed by the speakers at Jang Economic Session on ‘IMF Bailout – experts’ opinion’. The panellists were Fahim-ur-Rehman Sehgal, Monem Sultan, Erum Shaheen, Maqsood Butt, Jahanzeb Mirza and Agha Syeddain. The session was hosted by Sikindar Lodhi.

Fahim-ur-Rehman Sehgal said it was a good political slogan that the PTI would not take loan from IMF after coming to power but in reality it is not avoidable in current economic situation. He said debt burden has reached 86.8 per cent of GDP and to resolve the current account and budget deficit, IMF bailout package was necessary and there should be focus on industrialisation like China to avoid such situation in future.

He called for focusing on other sectors too for exports growth, besides giving incentives to exporters on raw material imports. Further, friendly countries’ finical support should also be sought, he added.

Monem Sultan said the government should not repeat previous governments’ wrong decisions and evolve long-term policies and implement them effectively to resolve issues. He said tax broadening was crucial for economic independence and business community should be brought in tax net. He called for revival of cottage industry which is backbone of the economy. He said the government should also keep its house in order by checking inflation. He said MNC employees could not run the country, only economic experts can resolve issues.

Erum Shaheen said IMF bailout will increase utilities’ rates and public problems while another budget is near after the mini budget. She said both government and people should change their lifestyle and discourage unnecessary imports, besides increasing exports. She said imports should be reduced and benefits of CPEC projects should be increased.

Maqsood Butt said approaching IMF was continuation of the past and every time loan would be required if tax net is not broaden to improve economic situation. He said IMF loans were the best option but through it US will increase pressure on Pakistan regarding Afghanistan issue. He said new wave of inflation after increase in electricity and gas prices, deprecation of rupees against the US dollar well before the IMF programme has increased public woes. He called for export subsidies to increase exports and taking industrial stakeholders on board.

Jahanzeb Mirza said the government delayed the decision of approaching IMF and there was no better option than approaching the IMF. He said Pakistan should try to get funds from other friendly countries.

He called for controlling budget and current account deficits, besides discouraging imports and encouraging local industry. Agha Syeddain said Pakistan is facing repayment of loan pressure and it has no other option than IMF bailout package and the decision should be made earlier. He said it was a fact that no country ever progressed or came out of IMF trap after availing its programme and Pakistan was forced to get IMF loan despite the option of Islamic Bank, Asian Development Bank and Saudi Arabia financial supports.

He said new wave of inflation will come due to currency devaluation which will adversely affect public and the poor. He called for ending import culture and focusing on increase of exports by giving incentives and rebates to exporters.