ISLAMABAD:Chairman of National Business Group of FPCCI and President Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain has said that the slow pace of privatization could result in frictions with the IMF.
Talking to the business community, he said that the differences with the IMF could hurt the remaining part of the programme as many governments over the decades had promised to sell bleeding enterprises, but the move was avoided due to political considerations.
Hussain said that IMF was pressurizing Pakistan to sell state-run companies bleeding the exchequer, but the private sector was not showing any interest due to many reasons including pandemic.
The veteran business leader said: “Trade unions and the opposition are also opposing the move while IMF is of the opinion that there is no other way to reduce the ballooning budget deficit.”
He said: “The lender thinks that tax target of Rs4.9 billion will not be achieved, circular debt will continue to rise which has jumped from Rs1.2 trillion to Rs 2.4 trillion during the tenure of incumbent government while Steel Mills, PIA, Railways and other failed institutions will continue to waste trillions of rupees.”
The IMF is also uneasy over the hike in the tariff of electricity and the price of petroleum products which it considers not sufficient to reduce the deficit to target as the government expanses and far more than the revenue, the economic expert further said.
On the other hand, the government find hiking rate politically unfeasible as it will trigger inflation. He said that the reduction in current account deficit was being considered as a great success but it was at the cost of GDP, revenue and jobs, he said.
Hussain noted that borrowing from local as well as foreign sources had reached a record level and privatization was the only answer to the challenges.