I would like to mention that my entire business and work is allocated in Pakistan, and my income is being generated from within the country. Many of the country’s politicians have kept their assets in other countries abroad, all their business and income is generated from foreign countries. It is my wish that they kept their assets and income here in Pakistan. But it is their fundamental and basic right to establish businesses wherever in the world they want to. However, they have to declare their assets if they pay tax in Pakistan and participate in the elections.
Conferring about regional growth; the world is purging recession. America’s growth rate has reached 3 percent. Europe is facing difficulties now days. India’s growth rate has ascended 9 percent in this international recession, while Bangladesh has increased its by 6 percent. Sri Lanka is rising in its massive growth and at the end, Pakistan’s situation is apparent.
I consider the policies as failures, those that were implemented on Pakistan by IMF. They should not have been applied. The policy was postulated to decrease inflation; it did but it started to rise again. That policy has completely damaged Pakistan’s growth rate. The country’s economy has worsened due to that policy.
We tried to decrease inflation with the increase in interest and we eliminated the subsidies, yet inflation has found its way back into our economy.
According to me, this policy has failed and we haven’t developed our domestic resources. If we have progressed at all, it’s because of the external flows- all due to the aid from abroad.
Many have said that Pakistan’s foreign exchange reserves sum up to $17 billion. My calculation is different. $4 billion from that amount are bank deposit, which means that money is not ours under any circumstances. The amount is a foreign exchange, but in the form of bank deposits. Then, $8 billion from the so called $17 is IMF’s money. Pakistan’s reserves are a total of only $5billion.
I do not wish to portray a ‘dooms day scenario’ but it is obvious that if we allow our economy to exist on its status co, we will witness a rise in inflation, decrease in the value of rupee, an addition to unemployment with the economy suffering severe strain.
Currently we have very gruesome terms with IMF. We have not received any payment from IMF since May 2010 and it has also signed a deal with us before the budget. It has ordered us to announce the budget in July while it’ll examine matters later.
I anticipate that the ‘bailout’ package with IMF is impossible to be made at the moment according to the current situation. We were promised to receive Rs. 566 billion from IMF but only Rs. 90 billion have been granted to us from multilateral and bilateral sources. If we do not sign the bailout package with IMF, other donors will restrain from investing in the country. Mark my words: the next package IMF will present to us will be very tough. It will be demanding and oppressive. The package will order us to wake up at 6 in the morning, when to head to bed and what to do in between.
The government still hasn’t cut back its expenditures. In my humble opinion the government’s current expenditure is non -developmental at the moment. Apart from the salaries, there should be a deduction of 1/3 in the remaining expenditure. The government’s expenditure has increased by 15 % in the past 15 years.
Some say that the world is under an inflation phenomenon. I say it isn’t. There isn’t inflation in America. Instead it has a deflation problem that it has hardly very difficulty by massive public spending. Europe has also spent trillions of dollars on huge public spending. There is very little inflation in China or in India. The world is under recession at the moment and that is what we were discussing. Inflation is high in Pakistan along with recession and very low growth rate. Otherwise there isn’t an inflation problem anywhere in the world; there is no such inflation phenomenon in the world.
There can be steps taken for the Pakistan to progress in the positive direction. Every politician and political party stood up for the 18 amendment. They should adopt the same attitude, excogitate and come together for the economic revival of the country. An economic emergency should be declared and inside and outside the parliament. All the political powers should prepare a plan for the country especially a program to figure out how much tax should be levied on whom. The parities should take a position openly on how to solve the problems of the country.