Moving to International Monetary Fund no solution as industrialization can cope fiscal balance

Lahore, February 13, 2013 (PPI-OT): With a view to manage fiscal balance, the government has to give incentives for export-oriented industries instead of moving to IMF for loans on humiliated repayment conditions.

For this purpose, the government has to focus on investing in energy solutions and enforcement of law and order while lowering of tariffs on smuggling-prone items, increasing the share of direct taxes in revenue to achieve key economic targets, observed PTA central chairman Agha Saiddain.

He said that rising risk perception about investing into Pakistan is hitting hard the Foreign Direct Investment (FDI) that fell sharply in recent months and needs to be tackled through a comprehensive policy approach by involving real stakeholders. He said that the bad law and order situation was one of the major factors keeping the foreign investors away.

He said that quality production and private sector growth were necessary for the development of any economy. “Pakistan is a land of opportunities and naturally has all resources to become an economic tiger, however, there is need to work together for the betterment of the country,” he added.

He stressed the need for the government to put the resolution of energy crisis as its top priority in order to increase exports and to avert a balance of payments crisis.

He said that Pakistan would have to repay $2.9 billion to the International Monetary Fund in 2012-13 in 12 monthly instalment of $241 million each while the country has already repaid $1.2 billion to IMF in 2011-12, out of the total loan of around $8 billion.

He said the government has to remove the bottlenecks discouraging foreign and domestic investment, including energy shortages and war on terror after effects, besides reducing cost of doing business and announcing consistent policies.

The business leader said government should adopt the Indian or Chinese model of facilitating its own entrepreneurs and convincing their expatriates to invest in their own country. This policy has paid off for them and it can work for us as well, he added.
In order to tackle energy shortages, the PTA chairman said, the government would have to allocate maximum funds for construction of dams and water reservoirs, tapping of Thar Coal, completion of Iran-Pakistan gas pipeline and establishment of LNG terminals.

He said that the country’s reliance on costly thermal power is jacking up the cost of production and import bill. The country needs an urgent shift in its energy-mix in favor of hydel power and local fuels. Uninterrupted and affordable power supplies can turn Pakistan into an economic powerhouse.

On the poor the state of law and order, the leather industry leader said that it is hurting Pakistan’s potential as a highly attractive investment destination. Foreign and local investors are lacking confidence to operate in Pakistan. He said that a number of industrial units had already shifted their operation to other countries.

He said that all the developed countries accord special importance to economic issues and the challenges. But in Pakistan the situation is the other way round and the economy is on the bottom of government’s to-do list.

He said that a number of sectors in Pakistan including infrastructure development, coal, energy, agriculture, livestock, leather, textiles and pharmaceutical offer lucrative investment opportunities to foreign investors but unfortunately due to absence required funding for a proper and well tailored marketing strategy these opportunities are unattended even today.

For more information, contact:
Moinuddin Quraishi
Pakistan Tanners Association
46-C, 21st Commercial Street,
Phase II, Extn., Defence Housing Suthority,
Tel: +92-21-35880180, 35880184, 35899819,
Fax: 92-21-35880093

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