APBF president shares his vision for sustainable economic growth
The All Pakistan Business Forum President Syed Maaz Mahmood, while sharing his vision of sustainable economic growth, has said the real solution to Pakistan’s problems lies in reforms, as we can see very large inefficiencies in tax collection and stagnant exports growth.
APBF President stressed that focus should be on promoting exports and restricting imports alongside making the domestic industry more competitive and subsequently expand its export market.
He said that exports of goods and services are an injection into the circular flow of income leading to a rise in aggregate demand and an expansion of output, helping raise per capita incomes and reduce extreme poverty especially in developing economies like Pakistan.
He said the tax compliance must be improved and tax base be broadened, which cannot be achieved with a single policy change, but by a systemic approach, he added. He observed the government preferred direct taxation to meet revenue shortfall as opposed to resorting to increasing indirect taxes because direct taxes tend to be more progressive in nature, therefore, the burden on the lower-income strata of the population is lesser.
President Syed Maaz Mahmood, in a statement, emphasized that concentrating on import substitution is imperative to narrow import bills and certain imported products such as oil are of a fixed nature, therefore, the government needs to enhance focus on import substitution industries, as chemicals, agriculture and steel are potential industries.
He said that undertaking structural reforms require political will. He said that enacting structural reforms, such as improvements in the tax collection system, bureaucracy and ease of doing business requires major political will and strict implementation of policies, he added.
He stressed the need for reforms, with a keen focus on value-addition for sustainable economic growth, recommending the government to raise exports to double-digit of the GDP, as Pakistan’s exports have bounced back after witnessing a decline.
President Syed Maaz Mahmood said that consistent borrowing by developing economies to shore up its reserves in desperate times is only to lead towards a debt trap. He said that borrowing from friendly countries should only be seen as a short-term solution to prevent reserves depletion and consequent further depreciation of the currency.
APBF Chairman Ibrahim Qureshi said that world trade has not still come out of the dip in the wake of lingering corona pandemic, as exports of regional countries including India and Bangladesh registered a decline but Pakistan’s exports bounced back.
Regarding market diversification, the APBF leaders pointed out that not much progress has been shown in this regard, as the exports still seem to be heavily dependent on traditional export markets. He underlined the need for evaluating geographical diversification in order to re-align the focus towards new opportunities. The government agencies will have to extend all kind of necessary support to the exporters in order to achieve the targets, not only in terms of numbers but also with regards to intended policy outcomes.
He observed that the World Bank, IMF and donor agencies should be considered as a stop-gap arrangement, which may have forced excessive devaluation, steep monetary tightening, cut in development and defence expenditures. Loans simply serve to bridge the gap until the effects of the reforms take effects. The problem occurs if the country takes loans but fails to reform, he added.