While the business community expects a difficult ride ahead, the approval of a nine-month $3 billion Stand-By Arrangement will bring an end to a long period of economic uncertainty and instability.
Irfan Iqbal Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), stated that securing the IMF programme was crucial at this critical point in the country’s economic history.
He stated that, despite being difficult on trade and industry, businesses welcomed the IMF rescue programme in the wider national interest since it would open up external capital from bilateral, multilateral, and international institutional sources.
He emphasised that the government’s economic team should now manage the external account cautiously and aggressively, avoiding any such periods of delays and procrastination in macroeconomic decision-making.
Asks govt to take advantage of this opportunity for radical reforms
According to the apex chamber chief, the business community is more concerned with the post-IMF SBA, medium to long-term consistency in economic policies, rather than a temporary breather to the economy and its costs to trade and industry, and this approach reflects the business community’s regard for the national interest and national economy.
He questioned the administration on how and when it plans to reassure the business community about its IMF commitments and their macroeconomic policy consequences, as well as what its plan of action is for much-needed economic stabilisation.
He explained how policy development will remain apolitical, as well as what the post-SBA, inevitable, and longer-term IMF EFF programme will look like when the country reaches that stage in Q4FY24.
Faraz-ur-Rehman, President of the Korangi Association of Trade and Industry, warned that the IMF’s criteria, particularly those relating to power costs, will boost inflation, increasing the cost of production for enterprises.
Furthermore, the IMF-mandated relaxation of import restrictions is expected to put pressure on the dollar once more, he predicted.
Mr. Rehman urged the government to take this opportunity to put tangible measures in place to improve the economy and broaden the revenue base. He underlined the importance of providing prompt assistance to the export industry in order to increase income.
He felt that the IMF programme would bring economic stability and improve the government’s fiscal capabilities.
Former Minister of State and Chairman of the Board of Investment, Muhammad Azfar Ahsan, stated that there is an urgent need to attract sustainable foreign direct investment (FDI) and facilitate investors through a collaborative structure that can enable political governments, bureaucracy, and the military to collaborate in order to translate Pakistan’s vision into action.
In terms of political will to streamline processes, he stated that the country must first achieve political stability. The absence of continuity in leadership posts is the death of progress.
