President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Friday expressed concern over rising tensions between the US and Iran terming it a great threat to global peace and GDP. The global community should play its role in diffusing tensions otherwise, oil prices can jump beyond $100 a barrel leaving dozens of countries and billions of people vulnerable, he said. The increasing tensions can lead to global unrest, political turmoil and widespread poverty as budgets of all the oil importing countries including Pakistan will take a serious blow, he added.
Talking to the business community, the veteran business leader said that Saudi Arabia, UAE, Kuwait, Qatar, and Iran daily export fifteen million barrel of oil through the strait of Hormuz and its closure will result in a global crisis of high magnitude.
The former minister noted that ships and refineries of many countries including KSA, Norway, and UAE have already been hit which has added to the worries of an unprecedented oil price spike. On the other hand, the US continues to squeeze Iran, the military presence is being increased in the region and a plan has been initiated to bring down its oil exports to zero which can result in a clash which will be more damaging than wars in Iraq, Libya, and Syria which the situation will also have an impact on Pakistan.
Mian Zahid Hussain said that Iran is being isolated and its growth rate has been estimated to come down by six percent in the current fiscal which can result in a conflict. He said that EU and other influential countries should play their due role to bring both sides to the table otherwise the world will forget the losses of cold war and trade tensions between the US and China. Pakistan’s fragile economy is to suffer from the struggle between the US and Iran, therefore, a charter of the economy should not be delayed as the country is also facing many issues including FATF.
Accord with IMF to end economic uncertainty, says Mian Zahid
President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Wednesday said the long-delayed agreement with IMF may help calm the markets. After the agreement the local and foreign investors will be able to take decisions as uncertainty spanned over ten months has subsided, he said.
Talking to the business community, Mian Zahid Hussain said that the country is also facing challenge of facing the FATF which has grey listed Pakistan and hoped that the new economic team would tackle it successfully.
The veteran business leader said that after the IMF deal, the international institutions will feel comfortable to deal with Pakistan; therefore, the government should keep economic revival on the top of its preferences list. The government should not waste time in blaming the former government and give proper attention to the economy, he added.
The former minister noted that the IMF conditions will hit GDP and PSDP to take a toll on the businesses and the masses, therefore, some steps to boost economic activity should be taken to shield the poor from the negative impact. He said that many independent economists have voiced concern over leaving exchange rate to the market forces, therefore, this matter should be considered seriously.
Mian Zahid Hussain said that failed institutions like PIA and PSM should be sold without delay as the former has inflicted a loss of Rs400 billion while the later has added Rs467 billion to the losses while keeping WPADA afloat also require trillions of rupees per annum.
He informed that the first loan was acquired from IMF in 1958 when the dollar was available at Rs3, the golden period of democracy started in 1988 when the dollar was traded at Rs18 which has now jumped to Rs144 but it has not helped exports. He called upon the authorities to establish sector specific export companies to change the situation for good. He said that barring future rulers through legislation from getting loans without solid reasons would be a great success for the Prime Minister Imran Khan.
Mian Zahid wants new law to tackle reckless borrowing
President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Monday said current account deficit is expected to reach sixty billion dollars by 2023. Moreover, forty billion dollars will be needed to service the debts by 2023 which boosts total requirement to $100 billion which is a third of Pakistan’s GDP, he said.
The Veteran Business leader while talking to the business community, said that tax measures and improved economic policies will not be enough to tackle the challenge and only option to deal with it is rescheduling the part of the debt.
He said that the government will not be able to cut its expenses, a cut on defence expenditure is out of question; therefore, the axe will fall on the tax system. The government has no option but the swallow the bitter pill of imposing a tax on agricultural income, property sector, stock brokers, professionals, wholesalers and retailers.
The former minister noted that the former governments have promised the IMF to sell the bleeding enterprises wasting trillions but never honoured them but now the government cannot afford the luxury of dole out billion to keep them afloat. He said that Pakistan is to pay almost $20 billion to China, Saudi Arabia, UAE, and Paris Club which if rescheduled for five years will provide great relief.
On the other hand, multilateral institutions will not reschedule debt but due to IMF programme these institutions will be willing to lend another $10 billion dollars. Fiscal Responsibility and Debt Limitation (FRDL) Act, 2005 has not served its purpose, therefore, an effective law should be introduced to deter rulers from irresponsible and hasty borrowings.