DURING a meeting in Karachi on Wednesday, Governor State Bank of Pakistan, Jameed Ahmad, tried to allay the concerns expressed by the business community vis-à-vis import of essential raw material saying the country is likely to receive dollar inflows from next week which would help shore up the central bank’s rapidly depleting foreign exchange reserves.
Because of dollar shortage, imports were being restricted including that of food and industrial raw material.
This situation created a serious crisis-like situation in many industries, especially the textile where about seven million people have been laid off which also led to cancellation of export orders.
Hence, the latest statement by the SBP Governor that the banks have been directed to prioritize the opening of LCs for imports of food, pharmaceutical items, oil, agriculture-related items and raw material required by export-oriented industries is really reassuring and welcoming to keep the economy on the right track.
The dollar earning industries must be fully facilitated in every possible manner, otherwise the situation will become more precarious in the months ahead.
We understand that the government had to take some tough decisions keeping in view the balance of payment crisis but now as some friendly countries, especially Saudi Arabia and the UAE have announced to provide an economic lifeline of about $ 4 billion, the matters must move towards improvement.
The revival of the IMF program is also a must to keep the economy afloat and avert the default.
Other financial institutions such as the World Bank and the ADB also link their disbursements with the IMF program.
Hence, quick decisions need to be taken to break the impasse with the world lender, which also needs to demonstrate flexibility given the problems complicated by the recent floods.
Already the price hike has broken the back of common man and any additional taxation measures or substantial raise in power and gas prices will only trigger another unbearable wave of inflation in the country.
We are confident that our authorities concerned will put this whole situation before the IMF and secure the next tranche.
The government will also have to pay attention towards ending exchange rate disparity in the open market and interbank.
In addition, efforts should be accelerated to ensure early realization of pledges made at Geneva conference as well as the announcement made by Saudi Arabia for ten billion dollars investment. This will help uplift many sectors and give much needed impetus to the economic growth.
