Business leaders have urged the government that to rid Pakistan of its swelling national debt, it is crucial to put an immediate halt to wasteful bureaucratic spending and ministries' non-essential expenditures, with development work and policy implementation prioritised only after thorough research for national benefit. The business leaders argue that public officials should set the example by adopting austerity measures and forgoing luxury vehicles, offices, and residences styled after royal standards rather than asking the impoverished to cut back. They assert that rising debt has become a crisis on its own.
According to the State Bank of Pakistan (SBP), national debt and liabilities grew by Rs8.4 trillion, or 11%, by June 2024 compared to the previous year. This increase pushed total debt and liabilities to Rs85 trillion, with Rs4.6 trillion in liabilities alone.
Prominent industrialist Majyd Aziz highlighted the burden of both domestic and foreign loans, attributing this to extravagant spending, misplaced priorities, and excessive non-development expenses. He emphasised that federal and provincial governments must take actionable steps to reduce waste, noting that banks are more inclined to lend to the government, a trend that must be curtailed. While some analysts argue that loans from the International Monetary Fund (IMF) and friendly countries are essential for stability, Aziz warns that these loans often fund projects the country does not currently need.
He advocated for a drastic reduction in bureaucracy and human resources, with an immediate dissolution of redundant committees, agencies, and ministries. He recommends a three-year freeze on government hiring and fast-tracked privatisation, stressing that focusing solely on the privatisation of Pakistan International Airlines (PIA) is insufficient. Broadening the tax base to include currently exempt sectors, including agriculture, is also critical. Federal and provincial governments must modernise their approach to taxation so industries are not solely burdened.
Industrialist and trader Muhammad Farooq Shaikhani called for a multi-faceted approach to address the debt crisis, including expanding the tax base, eliminating tax evasion, and enforcing strict compliance to bolster national revenue. He stressed the need for prudent financial management, suggesting cuts in government subsidies, control over non-essential imports, and streamlined spending to reduce the fiscal deficit. In addition, he advocates for export-led growth and strengthening foreign exchange reserves through remittances and foreign investment to better meet external debt obligations.
Shaikhani advised the government to negotiate with lenders for debt restructuring to alleviate repayment pressures. He highlighted the importance of long-term reforms to attract foreign investment, which could enable financial independence and lessen dependence on loans. Key sectors such as textiles, information technology (IT), and agriculture need support to drive export growth.
To attract foreign investment, Shaikhani suggested adopting business-friendly policies, introducing tax incentives, and reducing bureaucratic hurdles. Enhancing energy infrastructure and addressing power shortages will also be essential for lowering production costs and improving competitiveness, he said.
Finally, he implored for more focus on vocational training and educational reforms to boost workforce skills, which will improve productivity. He also urged the government to enhance tax reforms to expand the revenue base and reduce non-essential imports to stabilise the trade deficit and support sustainable economic growth.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
