Daily Times

For the sake of positive national image all Pakistanis are expected to keep their cool. Let us think positively to have a clear understanding of what is happening around and what is good for Pakistan on domestic and international scene and that what should be our reaction and line of action. Opinion is important to know and reflect on, no matter what is your profession and standing in the society. Freedom of expression is important along with a positive and effective role of media to point out what is wrong and where? Correcting wrongs is moral, social and legal responsibility of all citizens. Watch against a culture of intrusiveness being inducted, which has to be checked. Failure to do so is risking the danger of dismantling the entire operational economic structure of the country. Pakistan’s main problem is that of its external account deficit. Devaluation can never be a help in fixing it. There is no empirical evidence to suggest real correlation between devaluation and sustainable growth in a country’s exports.

Instead of going the wrong way Pakistan has to follow taxation policies such as sales tax etc. of successful countries like Thailand, Japan and Malaysia. We have to keep the cost of doing business competitive. At the same time government has to provide incentives and facilitate exports and the refund system to help exporters So that they don’t have to face liquidity crunch. Think what could already cash starved exporters do in crisis situation? The government has to focus on real issues and get set to performance rather than blaming past government and their policies. PTI government is in authority. It has to demonstrate responsibility and accountability. The people want results – performance.

Now as $6 Billion IMF loan is approved for 39 months with an upfront payment of $1 Billion it is expected that a further 38 Billion Dollars will be available for Pakistan from external sources with IMF recommendations over the programme period which is a good sign for the economy having huge external payments. It means an average of Billion Dollar per month may be available for government to finance its external payments. In previous regime, facility extended by IMF to Pakistan, no amount of additional funding from other sources as a consequence of IMF approval was specially pointed out by the fund.

Now with these expected inflows, the position of foreign reserves will be stable and will definitely control rupee depreciation. It is expected that the Rupee will further appreciate and take place around Rs. 148-152 per dollar in near future. Meanwhile on the other side Mr. ShabarZaidi is determined to achieve a huge target of tax collection while broadening the base of tax payers by taking strict measures for documentation of economy, inflation will come down after touching a 13% peak which should result in decreasing policy rate accordingly. A stable rupee and availability of cheap funds, or anyone from these two, can reduce the pressure on industries heavily dependent on these twin input costs. If these twin input costs are not controlled, the situation of slow-down of economy may result in complete shutdown.

Experts in finance and economy have varying views, some do not at all recommend devaluation of Rupee.

Road forward starts with a conversation. We wish the United States and Pakistan to have a constructive dialogue to further strengthen the long-standing ties between the two countries

A recent report by IMF suggests that previous PML government as well as the current PTI government have failed to adopt expected measures during implementation. In both cases IMF discipline and suggested steps were not followed with some seriousness. IMF report on economy is a damning indictment of the lopsided policies and insufficient policy action by incumbent Pakistan Tehreek-e-Insaf (PTI). Unreasonably depreciated Pak Rupee is not in favour of even exporters which can get gain in short run but in longer time span it can hurt the going concern. This scenario is resulting in inflation in the economy. In such difficult time could we manage to get free of cost loan for the country as well as small and medium size enterprises? This is suggested for imports specially.

According to a PTI source, only 1% of 220 million population pay tax. If everyone contributes a Little, revenue target of rupee 5,500 billion is no big deal. Prime Minister Imran Khan urged the people the other day to pay taxes and asked the business community to work with the government as partners for prosperity of the country. He reiterated his pledge to hold accountable all the corrupt elements who had burdened the country with whopping debt of rupee thirty thousand billion. It is worth mentioning that the government collects only ten percent of the tax. The rest is done by slave unpaid labour who are subjected to coercion and penalties and other punishing behaviour. An example here is withholding tax and may be some other indirect taxes for which government should provide assistance and cost of handling the thankless job.

The United States confirmed that Prime Minister Imran Khans’s meeting on July 22 with President Donald Trump has been fixed officially. “The visit will focus on strengthening cooperation between the United States and Pakistan to bring peace, stability, and economic prosperity to a region that has seen far too much conflict”. The statement said that Prime Minister Khan and President Trump will discuss a range of issues, including counter-terrorism, defence, energy and trade with the objective of creating conditions for a peaceful south Asia.

The visit will help renew and reinvigorate long-standing ties between Pakistan and the United States says Foreign Office. During the visit, Imran Khan and Donald Trump would have wide-ranging interaction at the White House on July 22, 2019 covering bilateral and regional matters. During his engagements in Washington Prime Minister will underscore the importance Pakistan attaches to a broader and multi-faceted relationship with the United States; Pakistan’s commitment to peace and stability and the importance of constructive engagement to promote a political solution in Afghanistan. He will also highlight Pakistan’s policy of “peaceful neighbourhood” aimed at resolving disputes through dialogue and promoting the vision of peace, progress and prosperity in South Asia and beyond.

Road forward starts with a conversation. We wish the United States and Pakistan to have a constructive dialogue to further strengthen the long-standing ties between the two countries for enduring partnership on the basis of mutual interests and cooperation for regional and international peace for prosperity and stability.

The writer is former Director, National Institute of Public Administration (NIPA) Government of Pakistan, a public policy expert, political analyst and an established author