Structural, Economic Reforms Inevitable to Address Challenges, Pakistan Prime Minister Says

Islamabad July 16 2023: Prime Minister Muhammad Shehbaz Sharif said on Saturday that there was no other way but to initiate drastic structural and economic reforms, for which unity, sacrifices and struggle of all stakeholders including business community was need of the hour, to face the prevailing challenges and steer Pakistan out of economic and other problems.

He expressed these views in a meeting with office-bearers of Lahore Chamber of Commerce and Industry (LCCI) and renowned businessmen and industrialists here at Governor’s House. Punjab Governor Muhammad Balighur Rehman, LCCI President Kashif Anwar, Senior Vice President Zaffar Mehmood Chaudhry, Vice President Adnan Khalid Butt and a number of former LCCI presidents and business tycoons including Shahzad Ali Malik, Mian Misbahur Rehman, Almas Haider, Muhammad Ali Mian and Mian Anjum Nisar attended the meeting. Federal Finance Minister Ishaq Dar participated in the meeting through video-link while high-ups of various departments were also present.

The PM said the government was taking all possible measures for promotion of industry and agriculture; however, in the given circumstances and in the face of grave challenges, industrialists and business community would have to play their role even more actively for enhancing exports and stabilising the economy.

He said that industrialists and business community had vast experience in production and they were playing a pivotal role in the country’s economy. The business community should also consider the facts that despite having rich resources, why Pakistan’s economy was unable to achieve the desired targets and its full potential, he said, citing that Bangladesh textile sector totally rely on imported cotton, but it was developing fast and gaining a niche in the global market, while Pakistan’s textile was losing competition in the export markets. He asserted that Pakistan had been producing 14-billion-cotton bales, but today, it had decreased to mere five-billion bales and it was a collective failure. “We are living in a regime where industry has become nothing but rental income, as we are not ready to face challenges or to adopt modern technology,” he regretted and added that support and subsidies from the government had not be materialised properly,” he observed.

The prime minister recalled that as the Punjab chief minister, he had constructed farm-to-market roads in the province with a cost of Rs 100 billion, and these roads should have been constructed through the Sugarcane Cuss Fund. He added that in 1990, the then prime minister Nawaz Sharif had started economic reforms, which produced the best results, and the other countries also adopted that reforms model and progressed. He said that the developmental projects, initiated by Nawaz Sharif during his tenure, were delayed and their costs increased by 30 to 40 billion rupees, which could be spent on research centres of various crops and industrial sectors development.

Shehbaz Sharif said that the government was well aware of the problems being faced by industrialists and businessmen, asserting that no government could alone make a difference, but with an active support of business community. He called upon the industrialist and business community to play their due part and support the government’s initiatives aimed at promoting R&D (Research and Development); ensuring low cost of production; curbing power theft and tax evasion.

He also stressed the need for promoting Small and Medium Enterprises (SMEs) which was backbone of the economy, citing that Japan, Germany, South Korea, China and other developed countries achieved hallmarks on economic front just by focusing on the SMEs sector. He said that SMEs sector deserved the most for loans but the major industrial sector took away those loans and now they should tell the nation that how much exports they had enhanced.

Prime Minister Shehbaz Sharif said that it was a collective responsibility of the government, business community and affluent people of the country to think about the poverty-stricken and impoverished strata of society and take effective measures to improve their living standards. He said that all institutions would have to work and coordinate while remaining in their respective constitutional ambit, and the politicians, judiciary, businessmen, industrialists and other stakeholders would have to run the state affairs with collective wisdom.

Sharing his telephonic conversation with IMF Managing Director Kristalina Georgieva with the business community, the PM said that she expressed her reservations about the mistrust created in the past. He added that unfortunately, the Pak-US relations were hit hard by the ill-conceived decisions and remarks by the previous government, but the present coalition government, with collective efforts, had nomalized and improved ties with the USA. He mentioned that the US also welcomed and acknowledged government’s efforts and it was also eager to see development and economic wellbeing of Pakistan. During the previous government, he said, national interests were compromised for personal interests, and the economic situation had become even worse when the IMF pact was violated in the past.

Shehbaz Sharif said that the IMF MD appreciated his wisdom and praised him for fulfilling the agreement in Paris by saying that a strong partnership and mutual trust had now been established between Pakistan and the IMF. He commended Federal Finance Minister Ishaq Dar and his entire team for realising the IMF deal and tackling all its stages in a better way. He told the IMF MD that the incumbent government would complete its constitutional term on August 14, and after that the interim government would continue honouring the agreement.

The PM said that the incumbent government had saved the country from default, adding that now Pakistan reserves had reached up to US$14 billion, as the country had received US$2 billion from Saudi Arabia, US$1 billion from UAE and US$1.2 billion from the IMF. He mentioned that China had rolled over US$5 billion of commercial and sovereign loans, which also saved Pakistan from default. He said, “We have to take optimum benefit from the IMF deal by utilising the amount on economic development and people’s prosperity.”