Saudi loan stabilising economy and rupee: Mian Zahid Hussain

Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Friday said Saudi loan has improved the balance of payments situation and helped stabilise the rupee.

The loan has reduced IMF’s pressure on the government therefore the authorities should take advantage of the development, he said.

Mian Zahid Hussain said that a serious crisis has been temporarily averted but it will resurface again if the current policies were not changed.

Talking to the business community, the veteran business leader said that the government has to repay 12 billion dollars to international creditors therefore issues with the IMF should be resolved in a timely manner.

He noted that it will not be possible for the government to obtain more loans as long as issues with the IMF are resolved

Mian Zahid Hussain said that Saudi Arabia has helped Pakistan in difficult times but if the government does not control the imports even after Saudi relief of more than four billion dollars, the situation may deteriorate again soon.

He added that unnecessary imports need to be stopped immediately, as the pace of imports is raising concerns among concerned quarters.

He said that Pakistan’s exports were 16% of GDP in 1999, which is now 10%, but no attention is being paid to this important sector which is having a negative impact on the country’s development, employment and production.

He further said that the IMF has reservations about the government’s artificial development policies, huge expenditures, rhetoric instead of real reforms in key sectors and a slowdown in privatization of state-owned enterprises which are causing huge losses.

The lender is also not satisfied with the state of the energy sector and the tax system, which is a violation of the agreement reached with it.

The agreement with the IMF also includes a provision to reduce imports, which is not being implemented, which has made the current account deficit a major threat, but is not being addressed for the sake of political interests, which is very worrying, he observed.

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