ISLAMABAD – The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has publicly lauded the successful completion of the first review under the International Monetary Fund’s (IMF) Staff-Level Agreement (SLA), tied to the Stand-By Arrangement (SBA). FPCCI President Irfan Iqbal Sheikh, addressing the accomplishment, praised the Pakistani business community for surpassing revenue targets set by the IMF despite a challenging economic climate and stringent conditions imposed by the Fund.
Sheikh emphasized the necessity for Pakistan to formulate a concrete strategy to reduce its reliance on the IMF after March 2024. He underscored the importance of fostering trade and industry as viable means to generate resources internally, positioning them as preferable alternatives to ongoing dependence on external financial aid. In his vision for a more self-reliant economy, Sheikh advocated for securing affordable external financing from multilateral sources and international financial institutions (IFIs) such as the World Bank, International Finance Corporation (IFC), Asian Development Bank (ADB), and Islamic Development Bank (IDB).
In a strategic move to bolster domestic finances, Sheikh endorsed a proposed 40% tax on windfall profits earned by commercial banks during 2021-2022. He also called for tighter controls over speculative trading of the dollar, which he sees as a necessary step in stabilizing Pakistan’s financial environment.
Further financial reforms were suggested by FPCCI Senior Vice President Mian Nasser Hyatt Maggo, who highlighted the need for confidence-building measures with the business community. Maggo argued for rationalized utility prices and lending rates, which he believes are crucial for spurring economic growth. This growth would be underpinned by industrialization and an increase in exports, pivotal factors in Pakistan’s pursuit of economic stability.
As part of this comprehensive approach to economic reform, Sheikh also demanded a reduction in the State Bank of Pakistan’s key policy rate. He proposed rationalizing Export Finance Scheme (EFS) and Long Term Financing Facility (LTFF) rates to improve access to finance for businesses, which is seen as a critical factor in enhancing their competitiveness and capability to contribute more robustly to the national economy.
The FPCCI’s commendation comes after a rigorous initial review that began five months prior, in July 2023. The business community’s efforts have been recognized as instrumental in achieving these milestones despite high costs and challenging conditions. The FPCCI’s leadership continues to advocate for strategies that would eventually enable Pakistan to sever its ties with IMF support programs and take charge of its own economic destiny through strengthened trade and industry sectors.
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