KARACHI: Pakistan can easily overcome any sort of economic crisis related to food, fuel or finance as it is one of the few countries in the world which is blessed with rich natural and human resources. However, it only needs focused and honest approach to fix priorities through good governance.

These observations were made by business and industry leaders who were asked what options the government has to resolve three major issues of food inflation, high fuel prices and financial crisis confronting economic planners, vis-à-vis budgetary deficit, current account and trade deficit.

There was a general consensus among business leaders that most of the issues confronting the country and the masses are owing to mismanagement and could be resolved by ensuring good governance.

They regretted that after the Feb 18 general election, the new government of coalition partners in Islamabad got bogged down with the issue of judiciary.

They were of the view that the ruling coalition should focus attention on issues affecting the common man who voted them to power.

Food inflation is a global phenomenon caused by climate warming. As a result, many countries were hit by cyclones or drought-like situations, which have a devastating impact on their crops.

Nevertheless, Pakistan is still better placed where crash crops have been bumper, but bad management and wrong production estimates (by default or by design) have been the major factor for shortage and sky-rocketing prices of essential commodities, such as wheat and flour.

Allowing wheat exports at a time when correct harvesting figures were not available made the country to suffer financially and also caused an unprecedented shortage of wheat and flour, experts believed.

Muhammad Nisar Shekhani, chairman of SITE Association of Trade and Industry said it was baffling that even after a production 22.5 million tons of wheat last season, there was an acute shortage of the commodity.

Similarly, prices vegetables, edible oil, rice and pulses, are moving higher, partly in sympathy with global factors and partly due to internal factors where ‘cheap finance’ gave birth to a new generation of hoarders and profiteers, he added.

In a recent development, a new wave of price-hike has hit spices, with red chilies soaring from Rs50 per kg to Rs250 per kg in a couple of days. In short, first the people were deprived of bread and butter and now there is a turn for spices.

President of FPCCI, Tan veer Sheikh, is of a firm opinion that the situation would not have been so bad had the government would had put a check on stocks and supplies of essential commodities, and withdrawn all sorts of financing, particularly at reduced rates given under the State Bank of Pakistan’s Export Refinance Scheme (ERS).

A big money has also made its way into essential commodities trade from other sectors of economy, such as textile which is faced with a tough competition in the world market and is diverting huge idle funds to make quick profits at the cost of common man, Zulfikar Thaver, President of Unisame said.

Consequently, hoarding, stocking and profiteering have become an order of the day and everyone is having a free hand to make quick money at the cost of consumers, they believed.

He further said that Pakistan is encircled with food deficit countries and most of the trade with Iran was through official channels but lately most of the commodities find their way into both the countries through border trade.

Similarly, India is also getting huge quantities of foodgrains through border from where only wine and cows are being smuggled Mr Thaver said. In the past only Afghanistan had been totally dependent on Pakistan for all its essential commodities but more pressure grew after Iran and India started encouraging border trade.

Agriculture production can be enhanced without increasing land area or even pumping of more credit. The only move required from the government is to ensure supply of quality seed to growers of all crops, along with a strong check on imitated and expired pesticides and insecticides, Ghulam Nabi Morai, president Sindh Farmer Association said.

A political decision has to be made to come on with a heavy hand on suppliers of expired and imitated fertiliser, pesticides and insecticides as they have caused a colossal loss to crops and growers, he demanded.

With regard to energy and fuel crises, business and industry leaders believe that though the government had little control on rapidly rising oil prices in the world market, a lot can still be done by conserving energy and adopting measures to lessen the burden of high cost on common man. However, all this needs a dedicated and focused approach from the government through good governance and pragmatic measures, Iqbal Ibrahim, chairman all Pakistan Textile Mills Association (Aptma) said.

The first and the foremost step the government should take is to cut taxes on oil and share it with consumers.

Shaukat Aziz government had allowed 10 per cent premium to oil refineries to upgrade their installations, which should be brought to zero, and the same be transferred to the end-consumers, he added.

Aptma chief said an energy conservation plan be launched at the national level wherein during peak hours (from 6pm to 10 pm), electric supply to all hoardings and signboards be stopped.

In Thailand, the government has passed a law under which all shopping centres and malls, as well as external illuminations are banned during peak hours and the same can be done in Pakistan where a similar crisis was being faced by the nation, they pointed out. However, they added that the rulers would have to fix priorities as per aspirations of the masses and not for their own personal goals.

Regarding the financial crisis being faced by the country, business and industry leaders said these can be sorted out once the government machinery gives due attention to problems. However, before doing any planning or making a formula for pulling the country out of the current financial crisis, it was imperative upon the coalition partners to send a strong message of political stability across the globe.

The economy cannot fare well as long as political stability was not ensured, Eng M A Jabber, former vice-president of FPCCI said.

“Our exports are dwindling and so is the case with the foreign exchange earnings. This is aggravating the balance of trade, which has swelled to an unprecedented level of over $13 billion”.

Exporters say buyers were reluctantly placing big orders because of an uncertain political situation fearing that Pakistani suppliers in case of any political instability might not deliver them goods in time.

Since India and China have been categorised at the higher level of value-addition, Pakistan has been placed at the level of Bangladesh and Sri Lanka. However, having an advantage of local raw material (cotton), Pakistani exporters can do well once political stability is achieved and it would also help narrow the trade gap and lessen the burden on forex reserves. Higher exports would also help stabilise the rupee parity and ease pressure on inflation, they added.

But the foremost step the elected government should take is to make a cut in non-development expenditures at federal and provincial level. The hefty expenses incurred on foreign trips of dignitaries and big teams of officials should also be curtailed to reduce the budget deficit, Idrees Gigi, chairman of F B Area Association of Trade and Industry said.