Pakistan’s economy is in ICU and on ventilator, says S.M. Tanveer, Saqib Fayyaz Magoon

KARACHI: Acting President of FPCCI Saqib Fayyaz Magoon and Patron-in-Chief of United Business Group (UBG) and former caretaker provincial minister of Punjab, S.M. Tanveer, stated that Pakistan’s economy is in the ICU and shifting to a ventilator; there is no room for further losses in the country.

The tragedy of Pakistan, they mentioned, is that people have 31 trillion rupees deposited in banks, up from 22 trillion rupees, as people have become accustomed to interest-based profits. The government still needs to make the right decisions.

Speaking at a press conference at Federation House on Friday, President UBG Zubair Tufail, Khalid Tawab, Hanif Gohar, Mian Zahid Hussain, Tariq Haleem, Malik Khuda Bakhsh, Zakaria Usman, Asif Inam, Zafar Bakhtawari, Dr. Ikhtiar Baig, Ahmed Chinoy, and other leaders were also present.

Saqib Fayyaz Magoon said that they have constantly discussed IPPs, highlighting issues with high interest rates and electricity costs. Pakistan is the only country in the world not benefiting from alternative energy sources.

Thanks to the persistent efforts of their leaders, Dr. Gohar Ejaz and S.M. Tanveer, the government has successfully terminated agreements with five IPPs. Though closing these IPPs brings only minor benefits initially, they demand that all IPP contracts be renegotiated so that payment is made only for the electricity produced.

He emphasized that Pakistan needs to benefit from green energy and that a package for industries is being introduced for winter. Inflation is at a 44-month low, dropping below 7%. He urged a 4-5% reduction in interest rates, noting that a new burden has been placed on electricity consumers by increasing late payment charges for bills. FPCCI rejects this hike in late charges.

UBG Patron-in-Chief S.M. Tanveer noted that their focus remains on interest rates, IPPs, and FBR issues. FPCCI’s think tank has provided all the necessary data and research, addressing the actual realities. Despite inflation dropping from 9.4% in August to 6.9% in September, there has been no corresponding decrease in interest rates.

He demanded a 5% reduction in interest rates, stressing that past wrong decisions had negative effects. Lowering the interest rate would reduce the government’s debt burden, as a massive Rs. 48 trillion debt incurs significant interest costs. By not lowering interest rates, the government has paid an additional Rs. 200 billion in interest. With the current rates, industries lack capital, and no one can afford to take loans from banks at such high rates.

S.M. Tanveer demanded a 5% reduction in the interest rate in the November 2024 monetary policy and another 5% reduction in December. Terminating agreements with five IPPs was a major achievement, which will reduce electricity costs by 71 paisa per unit. However, the work isn’t finished yet, as there will be renegotiations with 18 more IPPs.

Electricity consumption dropped by 1,000 MW just in September. The government must urgently announce a reduction in electricity prices to Rs. 20 per unit. Capacity charges amount to Rs. 9 per unit, and the rest is fraud. The total cost of electricity supply and distribution by DISCOs is Rs. 25-26 per unit; the government must make a prompt decision on this matter as industries can no longer bear this burden.

He added that if timely decisions aren’t made by the government, difficulties will increase. Some people want to keep the country in crisis, but they will not allow that to happen.