‘Great Debate’: Experts urge ‘out-of-box’ solutions to deal with economic challenges

As the federal budget 2023-24 is set to be tabled in the National Assembly on June 9, Geo News has hosted a ‘Great Debate’ on the country's economy to discuss the challenges and measures being taken by the Pakistan Democratic Movement-led (PDM) government to steer the country from the issues.

Panellists include the Chief Executive of Lucky Cement Muhammad Ali Tabba, the CEO of Arif Habib Corporation Limited Arif Habib, the Chief Executive of Engro Corporation Ghias Khan, the Chairman Reforms and Resource Mobilisation Committee Ashfaq Tola, economist and associate professor at LUMS Ali Hasanain, Chief Executive Topline Securities Muhammad Sohail and Alpha Beta Core chief Khurram Shehzad.

The chief executive of lucky cement said the country’s balance of payment crisis can never be resolved without increasing the export volume.

Tabba said Pakistan would approach the International Monetary Fund (IMF) — the Washington-based lender — when other lenders refused to give loans.

Concurring with Tabba’s views, the Engro chief executive said Pakistan would be asked to share its economic plan whenever the country sought a bailout package from lenders.

“Pakistan imports food worth 10 billion dollars [annually],” he added.

The chairman of the government’s reforms committee Tola said that at least 10 other countries’ current account deficit was higher than Pakistan.

He lamented that speculations regarding default negatively affected the country’s economy and market sentiments.

Economist Hasanain said many people were trying to shift their capital abroad and added that the economy could not be stabilised only through the IMF programme.

Former finance minister and Pakistan Muslim League-Nawaz (PML-N) leader Miftah Ismail, who joined the debate via video link, said the country would need $25 billion annually even if the current account deficit was reduced to zero.

“It is still necessary to go to the IMF,” he said.

The former financial czar urged the federal government to stop making “plans A and B” and approach the global lender for the bailout package.

The chief executive topline securities said the chances of the country’s default were high without the IMF bailout package.

However, the Alpha Beta chief said the tough economic measures could help the economy to sustain itself without the IMF programme.

Prominent businessman Arif Habib emphasised that “out-of-box” solutions are required to deal with economic challenges.

He said overseas Pakistanis deposited $6 billion in Roshan Digital Account only to withdraw them.

Habib said the government should make policies to encourage overseas Pakistanis to invest in the country.

He suggested that a scheme should be launched under which expats could invest at least $0.2 million and in return, they should be given plots, customs duty vouchers and other incentives.

Those who availed the scheme should be exempted from import duty on vehicles, he added.

Moreover, he also warned that if the country defaulted, the consequences will be dire for everyone and added that people were suffering a lot due to rising inflation.

Zafar Masood, CEO of Bank of Punjab, who participated in the debate virtually, said almost 90 per cent Pakistanis pay indirect taxes.

He emphasised the need for a widening direct tax net and added that the social contract between people and the government is “very weak”.