Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Friday that the IMF had expressed its concerns about the federal budget, which are contrary to the expectations of the Prime Minister. He said Pakistan’s relations with the international organisation need to be improved instead of improving, which worries the business community and affects their confidence.
Mian Zahid Hussain said the government controlled the current account deficit by restricting imports, saving Pakistan from default. Still, Pakistan has to repay or roll over $20 billion in debt this year.
Talking to the business community, the veteran business leader said that repaying the debt is impossible without the IMF, so this fact should be accepted; otherwise, the country will go bankrupt.
The business leader said that the IMF is considering the current budget as a political budget, in which reforms in the energy sector have been ignored, and steps have yet to be taken to widen the tax base.
The IMF considers that remittances of one hundred thousand dollars a year have been allowed, amounting to an amnesty scheme.
Mian Zahid Hussain said that many countries had seen worse conditions than Pakistan but came out of the crisis due to strict measures.
In 1991, neighbouring India was left with $1.2 billion and was going bankrupt. The IMF and World Bank also turned away, but its political leadership accepted the challenge, and now that country has become a major economic power.
India has had many government changes since 1991, but the economic policies that have kept it the third-largest economic power the same.
Mian Zahid Hussain further said that production, exports, remittances, and employment in the country continuously decrease while inflation and anxiety increase, and serious economic and social problems arise.
The revenue targets in the budget are only possible by increasing the tax base. Instead of reducing expenditure in the budget, it has been improved, leading to excessive borrowing from local banks, which has also fuelled inflation.
He said a real review of the current budget has become necessary to bridge the trust deficit between Pakistan and the IMF.
Mian Zahid Hussain said important decisions, including privatisation, import substitution, energy reforms, and reduced business costs could save the country.
Otherwise, he said, the government coming after the current government will have to face more stringent conditions, and the people will face more inflation.