Small businesses propose steps for economic stability

KARACHI: The Small businessmen held a meeting with its Finance Committee Convener Shaukat Hassan and discussed the financial challenges being confronted by the country. They also recommend measures to the government for the consideration and implementation on a fast track basis.

Unisame President Zulfikar Thaver welcomed the participants during the meeting.

Hassan said that political stability is the key to development and all the political parties should work in this direction to save the country from economic turmoil.

He said the government must mobilise funds from friendly countries and request the overseas Pakistanis to contribute in it, as well. The expatriates are keen to see Pakistan growing and financially stable, he added.

He also called for removing restrictions from the imports of essential goods and raw materials, while the government should continue to impose a ban on the import of all non-essential goods.

In his suggestions, Thaver said that the government should adopt complete austerity in all the ministries, departments, embassies and consulates.

There is an immediate need to stop wastage of electricity, fuel, food, gas and water, he said, adding that if necessary, strict measures must be taken to implement monitoring

For him, the authorities need to promote day time business activities and closure of shops and markets by 8:00pm across the country.

Another chronic issue is the huge debt burden, which Pakistan has to repay in the next few years. In 2023 alone, the country has to repay around $23 billion of the $90 to $100 billion of the total debt obligations.

It will be a challenge, rather impossible for any government to meet these huge debt repayments; hence, it is critically important that the government and the State Bank of Pakistan (SBP) immediately mobilise its resources and approach friendly countries to overcome this challenge.

Through a task force, all government-owned entities such as the Pakistan International Airlines (PIA), Pakistan Steel Mills, utility companies, etc, should be brought under one umbrella company.

If these entities cannot be run profitably, then, there should be measures to sell these assets and generate income. However, efforts should be made to turn them around to be profitable and the efforts to utilise these surplus funds for debt repayments as a future strategy.

The Unisame members also said that an increase in taxes is not the solution, as this will be short-lived and reduce the purchasing power of the common man; thereby, shrinking the economy further.

The government should look for other ways to introduce taxes on the segment, which can bear the burden, such as those individuals and businesses, which have a net income of more than Rs1 million/month.

A special one-time tax for debt servicing should also be considered for these segments, instead of raising the taxes across-the-board. All such proceeds should go to an Escrow Account for debt servicing, they said.

The government should introduce financing schemes for overseas Pakistanis to divert their foreign currency holdings and invest in Pakistan through bonds and certificates etc.

It should also explore the possibility of rescheduling the debts from shorter period to longer period either through refinancing or spreading the tenor through fresh funding from friendly countries such as the Gulf Cooperation Council (GCC), Turkey and China.

The Unisame Council members endorsed the viewpoint of Shaukat Hassan and said that the government will need to cooperate with the International Monetary Fund (IMF) and follow their guidelines and seek favourable considerations, as without the IMF, it would not be possible to get the economy back on track.

Integrated efforts are required on war footing to substitute imported goods with the indigenous goods in collaboration with the Pakistan Council of Scientific and Industrial Research (PCSIR), Engineering Development Board (EDB), Small and Medium Enterprises Development Authority (SMEDA), National Productivity Organisation (NPO) and all other related institutions must join hands, they said and emphasised that Pakistan, as a nation, must gear up for this challenge.

Citing an example, they said, after imposition of sanctions, Iran adopted simple living by simply eating bread and tomato gravy and wearing clothes made up of their own fabrics.

The small businessmen also proposed the State Bank of Pakistan (SBP) to convene a meeting in this regard and chalk out the mechanism to resolve the problems of the industries for the import of raw materials, packing materials, essential goods and medicines.

The SME Bank must be merged with the Exim Bank and not National Bank of Pakistan as was indicated. The Exim Bank and the SME Bank could jointly promote escrow accounts and arrange credit for the suppliers’ of the SME units.

The members also suggested barter trade with the neighbouring countries, especially China, where special emphasis could be laid on the imports of chemicals, plastic granules, synthetic yarn and other raw materials in currency swap agreements on deferred payments. Likewise, we must also work with Iran in this direction.

In the end, the meeting participants vowed to help the government overcome these challenges. It is time that all and sundry should come together to address these daunting tasks.

Comments

Shaukat Hassan

Finance Committee convener

The government must mobilise funds from friendly countries and request the expatriates to contribute in it

Zulfikar Thaver

Unisame president

The government should adopt complete austerity in all the ministries, departments, embassies and consulates