In a recent discussion on a program titled “Today with Shahzeb Khanzada,” former Chairman of the Federal Board of Revenue (FBR), Shabbar Zaidi, expressed his views on various economic and political matters in Pakistan. Some key points of the conversation included the potential discontinuation of the 5,000-rupee note, the role of the U.S. dollar in Pakistan’s economy, and the challenges faced by the country’s financial system.
Firstly, Zaidi suggested that discontinuing the 5,000-rupee note and restricting the physical movement of dollars would be necessary measures. He argued that doing so would help address the issue of money laundering and illicit financial activities, which have been prevalent due to the ease of using high-denomination notes. Zaidi pointed out that people in Pakistan tend to store their wealth in dollars and 5,000-rupee notes within their homes and lockers, which can lead to a lack of transparency in the economy.
However, not everyone agrees with this proposal. Former Finance Minister Miftah Ismail disagreed with the idea of discontinuing the 5,000-rupee note, arguing that it would not solve the underlying issues. He cautioned that such a move could potentially create more problems, such as increased fear and uncertainty among the public.
Zaidi referenced India’s experience when it demonetized the 2,000-rupee notes, which led to a significant reduction in India’s Gross Domestic Product (GDP) growth rate. He argued that discontinuing high-denomination notes like the 5,000-rupee note could have a similar impact in Pakistan.
Moreover, the discussion delved into the use of the U.S. dollar in Pakistan. Zaidi emphasized that the excessive use of dollars in the country’s economy needs to be curtailed. He believed that a significant portion of the Pakistani population holds dollars, which could be better regulated to enhance the stability of the Pakistani rupee.
Regarding the economic challenges faced by Pakistan, Zaidi stressed the need for a gradual reduction in interest rates to stimulate economic growth. He also highlighted the importance of controlling inflation and encouraging local industries to reduce reliance on imports.
the discussion with Shabbar Zaidi touched upon critical economic and financial issues facing Pakistan. The potential discontinuation of the 5,000-rupee note and efforts to manage the role of the U.S. dollar in the country’s economy are important topics that require careful consideration. Balancing the need for transparency and financial stability with the potential economic impacts of such measures remains a complex challenge for Pakistan’s policymakers.
