International Monetary Fund (IMF), the World Bank (WB) has also suggested to Pakistan to leave its currency free from state control to let it find equilibrium against the dollar and other major currencies in a bid to help domestic economy grow to its true potential.
The World Bank has asked the Pakistani government to free the Pakistani currency from state control and allow it to compete freely with international currencies in the open market. This advice comes from World Bank Group Country Director for Pakistan Patchamuthu Illangovan. He said that “the [rupee-dollar] exchange rate should be based on market system.” He added that state’s control over currency restricted export growth, resulting into partial consumption of the State Bank of Pakistan’s foreign currency reserves to finance international payments mainly on import and debt repayment counters and created balance of payment deficit.
If you had retailed the 2005 market share of export globally (then) today you would have been exporting four times more than what you should be today,” he said, “Pakistan’s exports would have been worth over $108 billion today instead of around $25 billion in actual.”
Earlier, the IMF urged Pakistan to leave rupee free from the state’s control as a measure to help the economy flourish. To recall, Pakistan has been in talks with the international monetary institution to obtain a bailout for covering financing gaps on external front and fixing the faltering economy through structural reforms.
He further said that“Pakistan’s economy has a potential to grow at 30-35% per annum if gender gap is narrowed close to equal,” he said. He, however, simultaneously urged private sector to equally play their important role in shaping Pakistan’s future.
Targets (in the report) are achievable. Government cannot do it all alone as the private sector needs to come forward…create investment climate,” he said, adding Pakistan outperformed its regional peers till the 1960s. Later on, however, the rate of investment in Pakistan fell to a historical low of about almost half of what other countries maintained in South Asia.
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17 November, 2019