Thursday May 30, 2024

Dar comes down hard on Miftah for predicting country's default

Ishaq Dar's predecessor Miftah Ismail had said country will default in October if IMF programme not revived

By Business Desk
June 03, 2023
Finance Minister Ishaq Dar speaking to a business delegation in Islamabad, on June 3, 2023, in this still taken from a video. — YouTube/PTVNewsLive
Finance Minister Ishaq Dar speaking to a business delegation in Islamabad, on June 3, 2023, in this still taken from a video. — YouTube/PTVNewsLive

ISLAMABAD: Finance Minister Ishaq Dar came down hard on his predecessor Miftah Ismail, saying those predicting Pakistan’s default should be ashamed of themselves.

FinMin Dar's rage was directed at fellow Pakistan Muslim League Nawaz (PML-N) member and former minister who had recently stated that the country will fail in October if the delayed International Monetary Fund (IMF) programme was not revived.

Ismail, who was removed as the finance minister in September last year, told journalists recently that the delay in the IMF programme had pushed the country's economy into "current troubles".

"It is clear that Pakistan would default without an IMF programme in the last quarter of this financial year, if not by the end of this fiscal year," Miftah, who has quit active politics, said.

Ismail said that the IMF programme is "essential" for Pakistan if it is to avoid default.

But opposed to Mifath's pessimism about the country's finances, Dar — talking to a business delegation in Islamabad — said the government has taken several measures to stabilise the economy.

“What happened in the past has badly affected Pakistan’s reputation. However, the government is doing its best. We are well aware of the burden being put on the business community and the common men.”

He admitted that the country is passing through a difficult period but assured the business community that Pakistan would overcome these challenges as a nation.

“But the recovery will take time.”

Dar also recounted his previous achievements to improve the economy when the Pakistan Muslim League-Nawaz (PML-N) came into power in 1999 and 2013.

The PML-N leader lamented the political instability in the country and held it responsible for the economic crisis.

“Most difficult reforms have already been carried out. Whatever bleeding had to happen, had already taken place.”

While speaking about the delay in the IMF programme revival, which he called “unprecedented”, Dor noted that there’s no technical reason for it.

“Our top priority is to ensure all sovereign commitments are made on time and there must not be a delay even for a day. And it didn’t happen. But some people have this habit of giving dates of Pakistan’s default. I have been hearing that for the past year.”

A visibly angry Dar said, “They should be ashamed. You should be well-wisher of your country and you should be loyal to your soil.”

Ishaq Dar, however, rubbished the claims that the country would default and admonished the former finance minister without mentioning his name.

“Rather than giving people hope and giving them confidence, now there’s a new prediction for default in October.

I assure you Pakistan is a sovereign country. Pakistan has trillions of dollars of assets. If we have external debt of 100 billion dollars then we have assets as well.

“We don’t need to worry. This shall too pass.”

The $350 billion economy is in turmoil amid financial woes and the delay in an agreement with the IMF that would release much-needed funding crucial to avoid the risk of default.

The government has been in talks with the Washington-based lender since end-January to resume the $1.1 billion loan tranche that has been on hold since November, part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019.

However, sources told Geo News today that Pakistan had decided to negotiate a new programme with the IMF immediately after the budget as the coalition government is planning to conclude the $6.5 billion EFF without completing all the pending reviews.

The sources said that while negotiations on the ninth review were almost complete, a staff-level agreement is yet to be reached. Even after this review completes, the 10th and 11th reviews will remain pending.