Karachi, November 16, 2023 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called on the government to formulate a comprehensive strategy to emancipate itself from the International Monetary Fund (IMF).
While commending the government for completing the first review of the staff-level agreement (SLA) with the IMF regarding the current Standby Agreement (SBA), FPCCI President Irfan Iqbal Sheikh emphasized the need for a practical and business-friendly plan to break free from the IMF and its stringent conditionalities.
Sheikh reiterated that Pakistan should focus on developing tangible strategies to boost trade and industry, generating more resources internally instead of relying on the IMF for financial assistance. Expressing concern about the economic team’s inability to secure alternative external financing from multilateral sources such as the World Bank, International Finance Corporation (IFC), Asian Development Bank (ADB), and Islamic Development Bank (IDB), Sheikh questioned the delay in exploring these options despite the initiation of the IMF-SBA five months ago in July 2023.
Highlighting the current dependence on bilateral loans from friendly nations due to the lack of institutional arrangements with IFIs, Sheikh stressed the importance of shifting towards investment, trade, and industrial collaboration with friendly countries.
The FPCCI President urged the government to enhance regulatory oversight over speculative trading of dollars by commercial banks, citing a consecutive 17-session depreciation of the Pak Rupee in the interbank market over the last three weeks, with the exception of today.
Addressing recent developments in the international oil markets, Sheikh noted the bearish trend, with prices dropping to $80.90 per barrel today. He expressed disappointment that the government had not passed on the benefits of declining international oil prices to the public for the fortnight of November 16 to November 30, 2023.
On a positive note, FPCCI welcomed the proposed 40 percent tax on windfall profits of commercial banks for the years 2021-2022. FPCCI Chief emphasized the need to facilitate access to finance for the business, industry, and trade community by lowering the key policy rate of the State Bank of Pakistan and rationalizing the Export Finance Scheme (EFS) and Long-Term Financing Facility (LTFF).
Muhammad Suleman Chawla, Senior Vice President of FPCCI, proposed confidence-building measures with the business community. He suggested that the government could initiate economic growth by rationalizing utility prices and lending rates, which would contribute to industrialization and exports. Chawla argued that any program with interest rates exceeding 10 percent is ineffective given the regional and international competitive landscape. The FPCCI’s recommendations aim to pave the way for a more sustainable and accelerated economic growth trajectory for Pakistan.
