ICCI urges government to stop seeking fresh IMF loan

  • August 24, 2012
Government is seeking fresh loan from International Monetary Fund (IMF) in order to lower the immense pressure on foreign exchange reserves which might not prove beneficial for the country in the long term.
Yassar Sakhi Butt, President Islamabad Chamber of Commerce and Industry (ICCI), made these remarks while commenting upon country’s capacity to repay the IMF’s loan. He was of the view that it would be difficult for the country to survive economically, if the present trend of dependence on foreign help would persist for a few years more.
He said that the business community remained wary of and apprehensive at the prospects of IMF’s return because it was suspected that IMF’s rigid and harsh conditions could further slow down the economic growth.
ICCI President said that country has to pay $3.4 billion in 2012-13, $3.43 billion in 2013-14 and $1.35 billion in 20114-15 to retire IMF's loan and country's foreign exchange reserves would continue to face pressure due to payment of IMF loans in the next more than three years. Therefore, Government should not choose short-term gains over long-term economic stability, he maintained. 
Yassar Sakhi Butt said that instead of seeking IMF help, a permanent solution to the country's economic woes lies in exploiting more domestic resources and then frugally spending them through well-targeted allocations for national projects. 
He stressed for the need of bringing non-compliant sectors under the tax net so that Government could get more revenue from broadening its tax rather than relaying on IMF’s loans. 
ICCI President emphasized that Government should take business community and all relevant stakeholders on board before seeking another fresh loan from IMF so that optimum solutions could be found out for reviving the economy. 
He stressed that the Government should negotiate and identify the sources of revenue generation as to how it would manage to pay back huge IMF loans and make sure that industrial competitiveness is not suffered in any way by going to the IMF.