NEW REFORMS SUGGESTED BY APTMA TO STABILIZE PAKISTAN’S ECONOMY AND IMPROVE EXPORTS

The All Pakistan Textile Mills Association (APTMA) pleaded with all political figures and decision-makers to reach an understanding on how to escape the dire circumstances and stop the economy’s current downward spiral. They have suggested below issues-

Political and economic stability:

The first suggestion made by APTMA is that Pakistan attain political stability. The ability of policymakers to implement short-term macroeconomic strategies is being hampered by a turbulent political environment. They are also being forced to frequently change course on policies, which prevents many ongoing projects from being finished. The fluctuating currency rate, which continues to jeopardize the development made in industries like textiles, is another cause for concern. The last several months have seen a decrease in Pakistan’s exchange rate. The highest dollar value ever recorded in Pakistan was Rs 237 on July 27, 2022. (Pakistani). Pakistani textile materials are becoming more expensive, and exports are becoming less competitive as a result of this significant devaluation in exchange rates.

Competitive exchange rates:

Pakistan needs to stop propagating the false notion that exporters support currency devaluation in order to stabilize the situation. The government and central bank should concentrate on achieving a competitive exchange rate and true exchange parity. Exports provide foreign exchange at the lowest cost (3–4%), with no requirement to remit it and no interest charges. The administration also cannot disregard the necessity of implementing new, long-term plans with lower interest rates. In order to increase the confidence of investors and markets in Pakistan, it also cannot disregard the need for increased investments and revised rules.

Root level Economic revolution:

To enable Pakistan’s young and its potential to lead a grassroots economic revolution, barriers to entrepreneurship and creativity must be removed. Since raising interest rates to stabilize the economy is only effective in few Highly Developed Economies—a status Pakistan’s economy is still far from—Pakistan must abandon this approach to economic policymaking. The ideal way is through supply-side reforms that increase the labor supply and draw more people into the economy, which is why entrepreneurship and financial inclusion are so important.