White elephants continue to bleed treasury: Mian Zahid Hussain

Islamabad, January 06, 2021 (PPI-OT): Chairman of National Business Group of FPCCI, President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on the slow pace of privatisation process can result in frictions with the IMF.

The differences with the IMF can hurt the remaining part of the programme as many governments over the decades have promised to sell bleeding enterprises but the move was avoided due to political considerations, he said. Mian Zahid Hussain said that IMF is pressurising Pakistan to sell state-run companies bleeding the exchequer but the private sector is not showing Any interest due to many reasons including pandemic.

Talking to the business community, the veteran business leader said that 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. 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. 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 is being considered as a great success but it was at the cost of GDP, revenue and jobs. He noted that borrowing from local as well as foreign sources has reached a record level and privatisation is the only answer to the challenges.

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