LAHORE: Prime Minister Shahbaz Sharif has said that the economy is taking a positive turnaround due to untiring efforts of the government. The role of business community is of utmost importane.
The Prime Minister was addressing LCCI Executive Committee at the Governors House Lahore. Governor Punjab Muhammad Baligh-ur-Rehman and Federal Finance Minister Ishaq Dar through zoom.
LCCI President Kashif Anwar gave a detailed well thought out and well tailored roadmap to expedite economic recovery. He said that alternative energy, agriculture, import substitution and broadening of tax base are path to progress.
LCCI Senior Vice President Zafar Mahmood Chaudhry, Vice President Adnan Khalid Butt, former LCCI Presidents Mian Anjum Nisar, Sheikh Muhammad Asif, Mian Misbahur Rahman, Muhammad Ali Mian, Shahzad Ali Malik, Almas Haider, Secretary Finance, Secretary Commerce, Secretary Industries, CCPO Lahore, DIG Operations Lahore, CEO PBIT, DG TDAP, DGTO, Chairman FBR and LCCI Executive Committee Members were also present.
Prime Minister Shahbaz Sharif said that he has a deep attachment with the Lahore Chamber as he has served this organization as President. He said that the businessmen are facing difficult situation but the government is utilizing its all energies to make the things good.
“I have thanked the Managing Director of IMF while US Secretary of State Anthony Blinken has congratulated us on the approval of the IMF program”, he said and added that it also makes it clear that the previous government’s unfortunate blow to our relationship with the US was due to narrow-mindedness.
Shahbaz Sharif said that this government has worked day and night to smooth relations with the United States. During the last fifteen months, we have repaired our relations with the US and the efforts of Foreign Minister were also laudable. All this was possible through collective efforts. It is our aim that the personal interests should be placed under the national interests.
The PM said that the real thing is to solve the problems of entrepreneurs and take the economy forward. Pakistan has not followed the conditions of IMF in the past, so it did ask for a guarantee from us. Now it has got a nine-month breathing space with $2 billion from Saudi Arabia, $1 billion from the UAE and $1.2 billion from the IMF.
He said that currently, our reserves have reached 14 billion dollars. China must be mentioned in all these cases. China has rolled over five billion dollars of Pakistan’s commercial debt in four months. If China had not done this, we would have defaulted.
He said that this breathing space we have got is meant to reform and restructure. A country that was self-sufficient in jute, today imports cotton. Bangladesh’s textile exports have surpassed us. The same factories, the same system is there as in Pakistan, but how did their exports become more than ours? He said that this is our collective failure.
The industry has become a rental income in Pakistan. We don’t want to compete. We did not bring modern technology. We were supposed to spend on research. “During my tenure as Chief Minister, I spent a hundred billion rupees only on farm-to-market roads, but there was no difference”, he added. He said that in 1990, Nawaz Sharif came with an economic program which made a big difference.
The Prime Minister said that earning profit is the right of every entrepreneur but earning profit should not be the end of the story but should move on to next industry and research. He said that we had to increase electricity rates. This is due to the circular debt and it is also the demand of the IMF. We have line losses and transmission losses. The billing system is in shambles. He said it is also true that the taxes have been increased, but if the levied taxes are not paid, then additional taxes will have to be imposed.
He said that the Special Investment Facilitation Council is a recovery plan. The secret of Pakistan’s development and prosperity lies in it. revival of agriculture is the easiest task.
Federal Finance Minister Ishaq Dar, who attended the meeting through zoom, said that before the budget, he has detailed meetings with the President of Lahore Chamber Kashif Anwar and the budget was made according to his suggestions.
He said that borrowers cannot be choosers. The re-engagement of the IMF by us was a tough decision. We did as much as we could bargain. He said that various good announcement made in budget, were taken back half heartedly.
“I have been saying for the last twenty-five years that devaluation is the mother of all evils. Due to devaluation we have to increase the policy rate which has been 22 percent”, he added.
He said that we need private sector support in many things. We are running different models. It is hoped that our economy will reach six to seven percent in two years.
He said that if we win after the general election, we will fulfill the agenda of the business community. We realize that businesses cannot run with 22 percent markup. We will try to bring it down as well. He said that the government has set up a Central Monetary Unit to monitor State Owned Enterprises. He said that A way has to be found for the grey economy, but only in consultation with the IMF. He said that the confidence of businessmen is improving in Pakistan.
LCCI President Kashif Anwar lauded the efforts of Prime Minister Shahbaz Sharif, Finance Minister Ishaq Dar for economic development.
He said that in the budget, the government tried to give us all the facilities we were asking for, like the limit of SMEs was increased from 250 millions to 800 million. Remittances from expatriats with no source disclosure were enhanced to 100,000 USD, incentives for the IT sector and no new taxes were imposed. The government had to accept the conditions in the IMF agreement and many facilities given in the budget were withdrawn.
The LCCI President said that the difference between the state bank and interbank dollar rate is creating a lot of problems. Remittances have decreased by five billion dollars in the last year. Many problems are caused by devaluation. FDI is not coming into the country due to high cost of doing business.
He said that maintaining the system after the flood and covid was critical. It is to the credit of the present government that they not only managed the system but also addressed our grievances. We want to increase exports but the priority should be to reduce imports and that will be through industrialization and import substitution.
He said that many industries were closed after Corona. However, there is a problem with MDI fixed charges. It should be resolved. He said that regulatory duties and customs duties should be abolished on raw materials which are not manufactured in this country.
He said that the tax net has to be increased. The benefits should be communicated to those who are not in the tax net. Depreciation of rupee increases inflation and interest rate. The interest rate is twenty two percent. If it decreases, the business cost will decrease.
The LCCI President said that solar and alternative energy should be made mandatory for houses of more than one kanal. He said that work should be started on reservoirs and dams to avoid floods. He said that State Owned Enterprises should be privatized.
He said that SMEs should be promoted. They should be given easy access to loans. Banks should be asked to ease conditions for loans. Steps should be taken to regulate the undeclared money. He said that the confidence of overseas Pakistanis should be restored.
He said that government’s work on climate change is commendable. He said that Assessing Officer should be accountable if he does wrong. He said that political stability is essential for economic stability. He also requested Prime Minister to spare time for LCCI Achievement Awards.
