Worst is over, Hafeez tells business leaders in Karachi – Newspaper

KARACHI: In a two-hour interaction with large foreign investors in the country, financial advisor Hafeez Shaikh faced industry concerns and tried to calm his audience that the worst of the adjustment could
it will end and the year 2020 will be better.

More than 50 people gathered in the auditorium of the Chamber of Commerce and Industry of Foreign Investors (OICCI) to listen to Shaikh, who was there at the invitation of the chamber.

"He talked for almost an hour," says one of the participants in the meeting Dawn. "Mainly, his message was that the most difficult period has been handled, we are on the road to recovery, and he literally read the last paragraph of the press release issued by the International Monetary Fund (IMF) after the last review meeting for Tell us things are getting better. "

Rs200bn in bonds to deal with the circular debt soon

The exchange situation has stabilized, the exchange rate is relatively stable and the IMF program is being implemented to the satisfaction of the fund, he told the audience. He also explained why the zero rating was withdrawn for export-oriented sectors and promised that there would be no setback in this measure. Exporters will get more relief in the future, he assured the audience, adding that the circular debt will also be addressed through bonds worth Rs200 billion for which the IMF's green light was obtained.

In return, participants questioned him about interest rates, circular debt and tax refunds, as well as on specific industry issues.

"We told him that the business has been severely affected, everyone is suffering directly or indirectly," says one person who was present at the meeting. Dawn, adding that they tried to keep their own positive comments as much as possible.

“We told him that we support the government; its initiative as the extension of the tax base, which is a good measure, but what is the way forward from where we are? It took a little control of reality to be delivered. You have to understand that not everything is sunny, there are some concerns. "

People have been negatively affected by increases in interest rates and poor decision-making, such as withdrawing the announcement of the regulation of axle load. "These things hurt business confidence."

The OICCI shared its own research with the advisor, showing him a drop in business confidence in the current environment. “It does not have an industrial policy, if we have a foreign investor, where do I take them, what do I specifically point to? The ease of doing business is not just a number; It should be manifested and felt by those who run businesses or seek to open one. Where is the increase in the number of small and medium enterprises that are registered in the country?

One person said that his company's 500 million rupee tax refunds are stagnant for many months and they shared some details. Another person mentioned a 10-year refund that is also pending.

"After the meeting, he called the president of the Federal Board of Revenue (FBR) in front of us and asked about these issues, who told him that he did not know immediately, but that I will check and reverse it," he said. Dawn meeting participant. .

The oil companies complained about the losses suffered due to the depreciation of the exchange rate, which was not followed by an adequate upward revision of prices. To which, the advisor "said we'll talk."

The turnover tax is too high, one of the parties complained, which caused another call to the president of the FBR, who simply said that the matter is for parliament to decide since the taxes were established.

"In general, people felt reassured by their appearance," says the participant when asked how the advisor's words were received.

He did not assure the direction of the interest rate, saying that these matters are decided by the Monetary Policy Committee of the State Bank, although he did indicate that the revisions are based on inflation, which is not increasing and that the government has not passed for large quantities of oil. price hikes for four months yet.

Dawn Calls to seek comments from the financial advisor were not answered.

Published on Dawn, November 17, 2019