Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Wednesday said the government will have to swallow the bitter pill of increasing the price of petroleum products in the national interest.
The previous government had reduced the price of oil and electricity to trap the new government which has worked, he said.
Mian Zahid Hussain said that Pakistan has to import oil and gas while a large amount of electricity is generated through imported fuel.
Talking to the business community, the veteran business leader said according to an estimate, if current prices are maintained till June, the country will have to bear a deficit of Rs600 billion.
Therefore, he said, if prices are not increased immediately, the country will go bankrupt.
Mian Zahid Hussain said that if prices were kept unchanged, the government would have to face difficulty in obtaining loans from the IMF.
He said that Prime Minister Shahbaz Sharif had decided not to increase the price of oil in the interest of the people, which was a welcome development but the exchequer could not bear the burden.
If current prices are maintained, the deficit, which was expected to be 5% of the GDP will increase to 10% of GDP.
Mian Zahid Hussain said that the decision to keep the price of oil low for the benefit of all people is also benefiting those sections of society who do not need any subsidy therefore the method of targeted subsidy should be adopted through the Benazir card or income support to poor people.
Relief should be given to the poor directly and not through controversial measures.
Mian Zahid Hussain said that Pakistan’s economy is the weakest in the region after Sri Lanka. Sri Lanka has been declared bankrupt and now it is the turn of Pakistan which can be averted through unpopular decisions.
The previous government had drastically increased imports which increased the deficit so the present government should stop the flow of unnecessary imports, increase the import duty on them and immediately stop the import of luxury items while reducing the expenditure.
The balance of payments cannot be improved unless unnecessary imports are stopped and exports are increased.
Due to poor governance of the previous government, production and exports did not increase as expected, investment remained very low while buying power of the masses eroded.
Current political and Constitutional instability is detrimental to the economy which must be tackled urgently, he demanded.
