Pakistani business leaders fear Sri Lanka-like situation as an inflation storm rises


Imran Khan at a rally of his supporters in Lahore

Former Pakistan envoy to the US downplayed the importance of the recent bypoll win of Imran Khan’s Pakistan Tehreek-e-Insaf (PTI)

Our Bureau

As the dollar touched an all-time high of 224.92 against the Pakistani rupee, the business community gathered at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to analyze the looming threat of a Sri Lanka-like economic emergency.

FPCCI President, Irfan Iqbal Sheikh has called out the free-floating exchange rate of the State Bank of Pakistan (SBP) as the petroleum imports were being opened at a much higher rate than the interbank rate and have emphasized applying regulatory tools to minimize economic uncertainty, Dawn reported. “We are not far from a Sri Lanka-like scenario and radical decisions are needed to reverse the situation,” he warned, adding that the country does not even have enough foreign exchange reserves to cover two months of imports.

According to an FPCCI’s press release, leading businessman Aqeel Karim Dhedhi blamed the Shehbaz Sharif government for the country’s faltering economy and said that the government has failed to look into growing inflation. “Despite a foreign exchange bloodbath, the government has failed to appoint a governor for the SBP, which reflects poorly on the government’s seriousness in dealing with the situation,” he said.

As inflation rises with a fuel price hike, there have been protests across the country

In another statement, Patron Karachi Wholesalers Grocers Group (KWGA) Anis Majeed said the landing cost of imported pulses had increased by Rs 7-8 per kg in the last 10 days due to continuous rupee deprecation against the dollar and its impact had not been passed to the wholesale rates by the traders due to uncertain future exchange rates.

Since the Shehbaz Sharif government has come to power in Pakistan, the daily essentials are getting costly and have become out of reach of the common man due to recent hikes in petrol prices and power tariffs, a local media report stated.

The Russia-Ukraine war has also fuelled inflation at the global level, leaving the people of Pakistan in misery.

Meanwhile, former Pakistan envoy to the US, Husain Haqqani on Wednesday downplayed the importance of the recent bypoll win of Imran Khan’s Pakistan Tehreek-e-Insaf (PTI), which is being described as a “game-changer” for the country’s politics.

PTI won 15 out of 20 provincial seats that were up for grabs in Pakistan’s most populous province, Punjab. Its main rival in the province, Prime Minister Shehbaz Sharif’s PML-N, managed to win just four seats. Most of the PTI turncoats who voted for PML-N’s Hamza Shehbaz Sharif for chief minister lost the polls. Former Pakistan Prime Minister claimed that PTI won the by-polls despite the use of state machinery in PML-N’s favor. The PTI chief also insisted that free and fair elections were the only solution to Pakistan’s woes.

Haqqani, who is now Director for South and Central Asia at Hudson Institute in the US, said that PTI’s bypoll win should not be seen as a big shift and this victory does not reflect how people might vote in a general election.

“Conventional wisdom is that the recent by-poll win reflects a major win for Imran Khan’s PTI. But the 20 seats that were contested were all previously held by PTI so the party winning them should not be seen as a big shift. Compared to 2018 General elections, PTI got 400,000 votes more on these seats while PML-N also increased its vote total by 300,000. A low turnout by-election does not reflect how people might vote in a general election,” the former envoy said.

On the possible impact of the win in the upcoming federal election, the former Pakistani diplomat said things can change by the time of the next general election. He said Pakistan’s “establishment” has upset major political party’s supporters and that might impact its actions between now and the next election.

“Right now, Imran Khan is in the news and his followers are emotionally charged. Things can change by the time of the next general election. One thing is certain. Pakistan’s establishment has upset supporters of almost every major political party and that, more than anything else, might impact its actions between now and the next election,” he said.

Answering how the Pakistani establishment views the win secured by Imran Khan, Haqqani contended that if Imran Khan is fighting the establishment, that should mean that the state apparatus should be working against him.

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