Pakistan going through a serious economic crisis: Mian Zahid Hussain

FPCCI’s Businessmen Panel SVP, President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Friday said increasing exports is the best way to strengthen local currency, shore up forex reserves, tackle circular debt and retire foreign and local debt.

Pakistan is going through the one of the most serious crisis in its history which is the outcome of mismanagement of the past and the recent pandemic which can leave eighteen million people unemployed, he said.

Talking to the business community, the veteran business leader said that Moody’s Investors Service has put top five Pakistani banks under watch for possible downgrading of their long-term local and foreign deposit and credit ratings, suspecting Islamabad may default on repayment of debt to global “private-sector creditors” which would also weaken the banks’ ability to operate.

He said that this is a very serious development which is result of a delayed response to the issue of commercial loans that should be tackled properly, adding that manipulation of the exchange rate in the past, promotion of imports and discouraging good export policies have played havoc with the economy.

The former minister noted that Pakistani exports continue to fall since the last fifteen years to touch 7.6 percent of the GDP amid worries of a fall in remittances. On the other hand exports of Luxemburg stands at 224.8 percent of the GDP, exports of Vietnam are equal to 95.4 percent of GDP, Hong Kong 188 percent, and Bahrain 88.1 percent.

 According to World Bank’s data, Iran’s exports are 25 percent of its GDP, Bhutan 25 percent, India 20 percent and Bangladesh exports are 15 percent of its GDP, he informed.

 He said that Pakistan’s exports are far from satisfactory as the total exports were never enough to pay the import bill. He lauded the government’s efforts of the government to document the economy and change its direction and asked the authorities to reconsider allowing the facility of zero-rating from the export sector. Pakistan should explore non-traditional market for improving the overall situation, he said. 

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