KARACHI (Agencies): Industrialists in Sindh have expressed concern over Pakistan’s escalating debt burden, which they say has not only damaged the national economy but also led to rampant inflation, adversely affecting the common man. They are calling for policies that reduce dependence on loans and create more revenue streams to make the country self-reliant.
Farazur Rahman, Patron-in-Chief of the Businessmen Group, told WealthPK that the substantial external and domestic debt is weakening Pakistan’s economy, negatively impacting businesses of all sizes and individuals from various income groups. He emphasized the need for the government to reduce reliance on external debt by strictly controlling imports of unnecessary and luxury goods. He also advocated for the promotion of local industries, particularly small and medium-sized enterprises (SMEs), to meet the domestic demand for raw materials and essential items.
Rahman suggested that long-term policies are needed for SMEs, industries, and the agriculture sector to create opportunities for both foreign and local investors. He also proposed the introduction of a customized financing scheme with low mark-up rates to encourage business expansion. He stressed the importance of the government working on the broad theme of ‘Made-in-Pakistan’ to promote local brands and explore various avenues to generate foreign exchange, such as exports, remittances, foreign direct investment, and other sources.
Muhammad Farooq Shaikhani, President of the Hyderabad Chamber of Small Traders and Small Industries, highlighted that Pakistan is grappling with sluggish economic growth, escalating inflation, rising unemployment, and a formidable burden of both internal and external debt, which has surged significantly in recent years. He described Pakistan as being trapped in a ‘debt trap’, exacerbated by recent increases and a contracting economy, making the repayment of debt and interest increasingly untenable.
Shaikhani recently wrote a letter to Federal Minister for Finance Muhammad Aurangzeb, offering suggestions for debt mitigation. He criticized the government’s practice of taking loans from banks at an exorbitant 22% rate, likening it to attempting to collect water with a sieve. He expressed the view that high-interest lending conditions discourage investors and industrialists looking to set up new industrial units.
Nadim Memon, a prominent industrialist in the SITE industrial area, called for the creation of a conducive environment and the provision of affordable loans to boost Pakistan’s exports. He also urged the government to collect data on small traders, farmers, and daily wage earners to formulate a consistent economic policy. He said the government should work proactively to tackle the issue of massive debt, which could otherwise sink the national economy.