The midnight tirade

June 19,2019

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When I presented the budget last year, the PTI created a lot of ruckus – hungama – during my speech. Three MNAs were especially more enthusiastic, with Dr Shireen Mazari even trying to snatch my speech at one point.

We had to have a couple of our female MNAs stand around me to keep Dr Mazari from reaching me. My daughter, sitting in the gallery, started to cry seeing all the belligerence, but for me it was just our noisy democracy in action.

None of my cabinet colleagues, including my boss Prime Minister Shahid Khaqan Abbasi, took the sloganeering to heart or got upset – even though these were very personal slogans against our leader Mian Nawaz Sharif, who of course is a father figure and much loved and respected by all of us.

Contrast this with the budget speech given by our young minister Hammad Azher. He started off with the assembly all quiet but in the middle there was a lot of sloganeering against PM Khan. I must say Hammad delivered the speech well and showed grace under pressure. Unfortunately, the same cannot be said of our prime minister. He must have felt really angry at this perceived insult and considered it below his dignity that members of the opposition would protest in his hallowed presence. He is after all a World Cup-winning captain who could have easily spent a life of leisure in England and it was his selfless love for Pakistan that he came back and magnanimously became our prime minister. For the opposition to not appreciate this heroic sacrifice must have touched a raw nerve.

Livid at this lèse-majesté, PM Khan decided to urgently address the nation at the midnight hour and announced a commission to investigate why the previous two governments had taken huge loans during the last ten years. Perhaps because it was edited at many places, the speech didn’t have a nice flow and seemed to have been delivered in raw anger, no doubt only at past corruption and not at the perceived insults from earlier that evening.

Shahid Abbasi has said that although he would be happy to go in front of that commission, Prime Minister Khan need not form a commission and all he needs to do is to call the finance ministry and it can give PM Khan a presentation spelling out all the debt taken and where it was spent.

Since the prime minister seems unaware, and because I feel generous, I will give my readers today the ‘hisaab’ during the PML-N’s tenure. (For the PPP hisaab, PM Khan only need ask Hafeez Shaikh, his and former president Zardari’s adviser on finance, and Saleem Mandviwala, his and president Zardari’s choice for deputy chairman Senate).

Let me start by saying that the Rs30,000 billion debt figure at the end of the PML-N tenure as quoted by PM Khan is not true. The debt at the end of June 2018 (a month after we left) was Rs24,952 billion. Let me quote from the most recent Economic Survey of Pakistan (page xi). “Total public debt stood at Rs28,607 billion at the end of March 2019, recording an increase of Rs3655 billion during the first nine month[s] of [the] fiscal year”. This clearly shows that debt at end June was Rs24,592 billion.

Since we came with public debt being at Rs14,292 billion (Box 1, page 138, Pak Econ Survey) and left at public debt of Rs24,952 billion, the gross increase in debt by us was Rs10,660 billion. But as my senior colleague Ishaq Dar has rightly argued, this doesn’t take into account the money we left in the government’s various bank accounts. If we deduct the money that was left in government accounts and add the money that we inherited, another Rs1000 billion would need to be deducted. This would mean that the net debt increase during our tenure was around Rs9600 billion. Contrast this with the debt burden – of Rs5000 billion – that will be increased by the PTI in just one year.

PM Khan likes to pontificate about the debt but in reality no accounting can be done unless you take into account the total resources at the government’s command. The resources at the PML-N’s command over five years were the taxes it collected of Rs16,277 billion, the total deficits that were financed by borrowing Rs8324 billion and the total non-tax revenues of Rs4056 billion. This means we had Rs28,661 billion at our disposal over five years. Below I will give an accounting of where they were spent.

We gave Rs8328 billion to the provinces and Rs6563 billion in debt servicing. Also, in the five years that the PML-N was in government, details about the military’s sensitive expenditures were kept confidential and were not part of the public discourse despite the fact that the relevant ministers knew the details. It is during the current government that such details have become a source of public speculation.

Continuing on, we gave Rs1226 billion towards pensions, Rs755 billion for the Benazir Income Support Programme and non-PSDP development programmes and Rs1379 billion for running the civilian government. In addition, we gave grants of Rs1669 billion and spent Rs1440 billion for general public services.

Finally, we spent Rs2819 billion towards development expenditures including setting up power plants at Haveli Bahadur Shah and Bikkhi, completing Tarbela’s Fourth Extension, Neelum-Jhelum hydro project, Kachi Canal, 1700 km of 6-lane motorways, over 8000 km of intercity highways, Gwadar airport, etc. Nawaz Sharif’s sterling record of development speaks for itself.

I have given total expenses of Rs27,748 billion. The remaining Rs913 billion includes loans to public-sector entities and many other small expenditures. This is our hisaab. Now I ask, without malice or anger, where is the current government’s hisaab? Why is it running a record deficit of Rs3000 billion? Why is it increasing our debt burden by a record Rs5,000 billion? If we borrowed, we built Pakistan’s infrastructure. What have they built, other than the Peshawar metro, to develop Pakistan?

The PTI first accused PML-N leaders of corruption because we increased Pakistan’s debt – but then failed to produce a single evidence of corruption even after one year of government. At a time when the government is producing the largest deficit and debt increase in Pakistan’s history, one would think the ruling party would show humility. The lesson PM Khan should have learnt was that budget deficits are a systemic problem that the PML-N, and especially Ishaq Dar, did a much better job in controlling and that it was wrong to accuse the PML-N of corruption. Instead, strangely, he’s now doubled down on his corruption accusation. But if Nawaz Sharif and his people stole Rs10,660 billion just because the PML-N increased debt burden by this amount in five years, then can the same logic be applied to the Rs5000 billion increase in debt burden by the incumbents?

The writer has served as federal

minister for finance, revenue and economic affairs

Twitter: MiftahIsmail


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