Business leaders slam devaluation

KARACHI: A cross-section of the business community strongly criticised the devaluation of rupee, saying the policy move would not only hurt the economy but would also severely stress the common man. They were of the viewpoint that this would cause cost of production to increase manifold and the economy will slow down and in the long run will not even help raise the volume of exports.

The Senior Vice President FPCCI, Mazhar Ali Nasir, said the new policy under the IMF pressure would not be helpful for the country’s economy. Mazhar said there could be a short term benefit but it would eventually lead to an increase in the cost of production. This will also kick up inflation and the interest rate, he added.

The President KCCI, Junaid Ismail Magda, said since our imports are on the higher side, the devaluation decision will not be beneficial and it will stir up inflation and damage the economy. On the one hand, the government is imposing regulatory duty and on the other hand it desires increasing the volume of exports, said Magda. He said only a certain group will benefit from this decision.

The Coordinator of Pakistan Value Added Textile Association and Chairman Pakistan Hosiery Manufacturers Association, Javed Balwani, said as much as 70 percent of our economy is based on imports and the sudden devaluation would not have a positive outcome.

Balwani said in case of a step-wise devaluation on a monthly basis the buyer does not seek discount but wants one when there is sudden devaluation. He criticised that decisions are being made without taking the exporters into confidence.

The Chairman of Pakistan Bedware Exporters Association, Shabbir Ahmad, said that such decisions only lead to a one-time increase in exports but the long term effects of the policy would be negative. This is a wrong move aimed at collecting more taxes only, he said. The exports could only be increased by virtue of an export culture and the government needs a re-evaluation of its policies, Shabbir said.

Former president FPCCI, Zubair Taufail, said the new policy will increase the cost of production of the local manufacturer and will increase unemployment and crime. Another former president KCCI Haroon Agar said the determination of value of dollar by market forces is not a good decision as this will lead to increase in prices of daily commodities.

Agencies add: Pakistan Tehreek-e-Insaf leader and Minister for Water Resources Faisal Vawda on Friday indicated that surge in dollar price was a temporary phenomenon and said it it will hopefully be under control shortly. He was responding to the criticism of the opposition about current rise in dollar value in forex market.

Talking to a private news channel, he specifically pointed out that the dollar value increased due to black market and said the government was confident of decline in its value soon. Vawda said that the surge in the dollar value was also witnessed during October and it was effectively brought under control at that time.

Pakistan Forex Association President Malik Bostan said “Yes, IMF conditioned rupee devaluation. The fact of the matter is that there was no other option left, but to devalue the rupee to avoid default on international payments.”

He said Pakistan has received a sluggish response against its efforts to acquire a soft loan from friendly counties to avoid the IMF bailout and the default too.