KARACHI: Prime Minister Imran Khan sought the business community’s cooperation to turnaround the faltering economy, and expressed hope that the central bank cut the benchmark interest rate which is needed to step up economic activities.
The business community, which is facing hardship in running businesses and facing continuous decline in sales amid the tough economic reforms, called on PM Imran at the Governor House Sindh in Karachi on Monday.
The business community repeatedly sought the prime minister’s assurance throughout the (40-45 minutes) meeting that the State Bank of Pakistan (SBP) must cut the interest rate to allow businesses and the economy to grow. “Prime Minister Imran (just) raised hope that the SBP should cut the interest rate (Tuesday),” a businessman said after attending the meeting, which was also attended by SBP Governor Reza Baqir.
The meeting took place a day before the Monetary Policy Committee (MPC) of the SBP is scheduled to announce interest rate for the next two months.
Federal Minister for Planning & Special Initiative Asad Umar, Adviser to PM on Finance & Revenue Abdul Hafeez Shaikh and Sindh Governor Imran Ismail flanked the prime minister.
Baqir maintained complete silence over the question of the rate cut, but explained that the economic reforms have started delivering the desired results. “He said (Baqir) the foreign exchange reserves have started building up,” Businessmen Panel Senior Vice chairman Mian Zahid Hussain told The Express Tribune.
PM Imran asked the business community to play its positive role and help turn around the economy. “The PM said people are losing confidence. You people (businessmen) should give them hope. We are passing through tough times. We need your cooperation,” a meeting participant said.
“We have the best economic team. They are delivering. They are not corrupt. Let Dawood come from abroad,” the PM was quoted saying this.
“PM Imran mostly invited suggestions during the meeting as to what should his government do to help businesses run and boost the economy,” Federation of Pakistan Chambers of Commerce and Industry (FPCCI) former senior vice president Khalid Tawab said.
“We have suggested PM Imran that the government should give an industrial policy to invite new investment and revive sick units,” he said.
Besides the high interest rate, the non-availability of gas and continuous increase in prices of power and gas badly hit the business and the economy at large, they informed the meeting.
“Almost half of the industries have either been shut down or are at the verge of closure due to the hardship,” another meeting participant told the meeting.
They told the prime minister that the country has achieved a massive 75% drop in current account deficit, but it was mostly achieved through discouraging imports. “The cut in imports under the economic reforms have encouraged smuggling of goods into the country,” a meeting participant said.
The prevailing high gas and power prices are also hindering revival in exports. If exports fail to pick up, all the economic reforms would go in to vain, the two sides of the meeting agreed.
“The smuggling is on rise mostly under the Afghan transit trade,” he added.
The hardship has resulted into high rate of unemployment in the country, it was discussed.
Published in The Express Tribune, January 28th, 2020.