Reality-Check No IMF Program Likely Before Federal Budget 2023 – 24
Karachi (PR): Mr. Irfan Iqbal Sheikh, President FPCCI, has expressed his profound concerns that the government and its economic team has not yet started the consultative process with the business community in general and the apex body FPCCI in particular. Less than a month is left in the announcement of budget as it has been slated for presentation on 9 th . June.
President FPCCI has invited Mr. Ishaq Dar, federal minister for finance & revenue, to meet the leaders of Pakistan’s business, industry and trade community to take stock of their proposals vis-à-vis federal budget .2023 – 24 and also listen to their issues, apprehensions & recommended solutions
Mr. Irfan Iqbal Sheikh explained that FPCCI wants to present and discuss its proposals on industrial, trade, shipping & transportation; taxation, SME, agriculture, IT & ITeS; monetary and fiscal policies with the government. Budget-making is the opportunity where we can have meaningful course correction – based on .ground realities; regional & global business environment and national interest
FPCCI Chief also expressed his shock that IMF has resorted to arm-twisting as it has raised – for no reason – the external funding requirement from $6 to $8 billion; sensing that the friendly countries have promised up to $5 billion in funding or roll-overs to Pakistan; and, Pakistan is pretty close to fulfilling the last condition and was asking for a relaxation of only $1 billion, when the target was $6 billion. This is unfair and unethical; and, the .international community must take notice, he added
Mr. Irfan Iqbal Sheikh questioned the IMF that the stalled EFF program was valid only till June 2023; but, contradictory to that, they have suddenly raised the external funding requirement from $6 - $8 billion for the next 7 months. It has no justification and it tantamount to undermining the whole budget-making exercise of a .country of 230.1 million
Mr. Irfan Iqbal Sheikh has emphasized that the government’s economic and financial team must be crystal clear now that IMF program is not going to materialize before the upcoming budget – which is only three weeks away; and, the government must prepare its budget accordingly. We, at FPCCI, have been observing that the government was making its budget on the basis of a resumed IMF program; but, given the fluid circumstances, .it now has to make major adjustments in the budget within the short period three weeks, he added
Mr. Irfan Iqbal Sheikh maintained that only solution that can steer Pakistan out of the crisis is indigenous with few basic principles: (i) simplification & broadening of the tax base; rather than squeezing the existing tax filers and harassment of the business & industry (ii) targeted subsidies to the five export-oriented sectors (i.e. Textiles, IT & ITeS, Leather, Sports and Surgical Goods) in electricity & gas tariffs; and, making it competitive through regionally competitive energy tariff (RCET) mechanism as exports earnings can manage the dearth of dollars in the country (iii) encourage remittances through bridging the gap between banking channels & open markets and protecting the assets of overseas Pakistanis in the country (iv) incentivize industrialization, export substitution and revival of sick units (v) make all economic policies in consultation with real stakeholders of the economy, i.e. business, industry and trade community of Pakistan (vi) all political parties must sign a national economic agenda & plan for the next 15 years to ensure continuity of economic policies and protect it from .political meddling
Brig Iftikhar Opel, SI (M), Retd.