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 Wednesday that the previous government’s efforts to develop the economy resulted in a payment crisis and this will happen again in the future. He said that our growth depends entirely on imports rather than exports, always leading to an unsustainable current account deficit.
Mian Zahid Hussain said that fostering a culture of exports and savings in the country is necessary to ensure development without a current account deficit. Talking to the business community, the veteran business leader said that GDP growth on a sustainable basis is only possible once the current savings rate is doubled.
The savings rate in Congo is 61.4 percent; in Singapore, it is 53.8 percent; in the United Arab Emirates, the savings rate is 47.8 percent; in China, it is almost 44.9 percent; and in India and Bangladesh, it is between 30 and 31 percent, he informed. However, in Pakistan, this rate is only twelve percent, rapidly decreasing due to current inflation and unemployment, he said.
Mian Zahid Hussain said that in 2007-2008, the growth rate was 4.4 percent while the current account deficit was fourteen billion dollars.
In 2010-2011, the current account was moved to a modest surplus by reducing imports, bringing the growth rate down to 3.2 percent.
In 2012-13 too, the growth rate was reduced to 3.9% to bring the current account under control. The situation was somewhat better from 2013 to 2018, but in 2017-18, the growth rate increased to 6.1 percent, resulting in a current account deficit of $19.2 billion.
The PTI government raised the growth rate to 6.1%. Still, imports increased to 80 billion dollars, resulting in a current account deficit of 18 billion dollars, which resulted in the worst financial crisis, which the masses are still braving.
By restricting imports and sacrificing GDP, the current government narrowed the current account deficit to $3.3 billion in the first ten months from $13.7 billion in the first ten months of last year.
The business leader further said that overseas Pakistanis send 27 to 30 billion dollars to their loved ones and relatives in Pakistan every year, which is eight to nine thousand billion rupees per year in the local currency.
Because there is no culture of investing through savings in the country, this amount is consumed, leading to inflation, and the government has to take foreign loans for investment.
Mian Zahid Hussain said promoting exports, foreign remittances, and savings is very important. One of the reasons for the situation in Pakistan is the unbridled consumption of the wealthy classes, which either they have to control or the government has to take measures to control it; otherwise, the situation will never improve.