FPCCI’s presidential candidate, Atif Ikram Sheikh, said on Monday that the government’s efforts continuously strengthen the rupee against the dollar, which is a great achievement. Due to the government’s initiatives, the prices of various commodities are decreasing in the market, relieving the public and the business community, he said.
Atif Ikram Sheikh, who has also served as VP FPCCI, Chairman PVMA, and President ICCI, said in a statement issued here today that while government efforts are laudable, the only way to stabilise the rupee permanently is to increase exports and discourage unnecessary imports. He said that remittances bring huge foreign exchange to the government and encourage unnecessary consumption.
Atif Ikram Sheikh said that consumerism has increased for decades, and investors have been attracted to non-productive sectors rather than industries with high profits.
Our economic model is disproportionately dependent on consumption. Over the last ten years, Pakistan has been maintaining consumption over 80 per cent of GDP, and more recently, its contribution to GDP has been as high as 90 per cent in FY-22 and 88 per cent in FY-23.
Reliance on consumption has led to a scenario where imports effectively drive consumption. GDP growth is fueled by consumption, which is inadvertently fueled by substances.
A mix of exports, remittances, and external debt provides the dollars required to fund these imports. As consumption continues to take up a significant component of substances, sufficient resources are unavailable to utilise imports for investments, resulting in a slowdown. Unless the export sector is made the most profitable, investment in it will remain low, and foreign investment will also be less than desired. He said that the agricultural sector could be a cause of earning foreign exchange and improving food security in the country for which this sector should be developed.
Russia is supplying grain to the whole world, while Pakistan’s canal system is five times that of Russia, but we have to import wheat, cotton, vegetables, and pulses, which is sad.
He said the situation can improve if the farmers are protected from substandard seeds, spurious agricultural drugs, substandard fertilisers, and loan sharks.