Daily Times

There is no disagreement that Pakistan cannot afford any form of economic uncertainty or shock since it could give rise to widespread anxiety. More than 150 spinning mills have closed recently, and thousands of workers have been laid off, according to Pakistan Textile Mill. Additionally, importers are talking about the shortage of ghee, edible oil, and beans in the nation as a result of import limitations. It is a reality that all types of importers are having trouble because the letter of credit procedure is halted. Representatives of industrialists and Chambers of Commerce and Industries from throughout Pakistan have requested the State Bank of Pakistan to relax import restrictions or they will be forced to reduce their activity.

According to Ahsan Zafar Bakhtawari, president of the Islamabad Chamber of Commerce and Industries, all export industries are waiting for the State Bank’s signal to open LCs to import fundamental raw materials and tools to produce products. It is reported that 90% of medications manufactured in Pakistan are made from raw materials imported from China and India. The rationale for not opening LCs is also obvious to everyone, and Pakistan desperately needs to increase exports in order to gain foreign exchange. Things will begin to return to normal with the opening of the door; in the meantime, everyone must play their part in the country’s economic improvement.

Although administrative controls to reduce wasteful imports are always welcome, the imports that are classified as essential are also hampered by a lack of reserves when establishing letters of credit. The issues stem from a lack of reserves, which has led to rumours that the interbank rate is insufficient to cover imports of necessities. This leads to serious supply shortages in the market and increasing prices for necessities like medications and manufacturers. As the finance minister loves to control the currency rate, the three current rupee-dollar prices are a reality; the trend is suffocating the inflow of remittances through official channels, and the hundi/hawala system, which had all but vanished during the pandemic, has resurrected. The government must try to reduce current expenditures with the budget deficit, a highly inflationary strategy that has reached unsustainable levels of more than 7.5 per cent during the Khan government. Though the government is spending money on subsidies, the poor and vulnerable have hardly benefited from them. It is hoped that common sense will prevail and that decisions will be made that prioritise economic over political factors. *