PPP’s charge-sheet against govt economic management

ISLAMABAD: The Pakistan People’s Party on Wednesday presenting charge sheet against the economic management of the PML-N government saying that it was characterised by fake and fudged numbers, an exchange rate artificially showing a stronger rupee, artificially build reserves, all of which are now unravelling as former Minister Ishaq Dar is in hiding, and hiding also is crimes of omission and commission.

“In our view the charges by NAB are much smaller as compared with this charge sheet which holds him and the PML-N government responsible for bringing this country to the verge of a financial disaster and worse off economically than 2013’s,” said Secretary Information of the PPP Parliamentarians Dr Nafisa Shah here on Wednesday along with PPP Media Coordinator Nazir Dhoki while presenting the charge sheet against the government’s economic management

She said the government’s profligate spending on boondoggle projects has led to huge debt burden on the nation, a current account deficit that is unsustainable and depletion of our reserves.

This was further compounded by wasteful expenditures which could have better spent in growth making projects. “Nawaz Sharif promised that he would break the begging bowl for this country,” she said adding that instead it reported that this is the second time this government is going with a begging bowl to a friendly country.

She said the first time was when Saudi Arabia gifted $1.5 billion to Pakistan and now apparently Shahid Khaqan Abbasi is going with one to China for a $02b injection. She posed the questions to the PML-N and said that it must answer many things for the present state of affairs.

First, she said after four years of artificially keeping the rupee strong against the dollar by injecting dollars into the economy, the government has, in the last 100 days, allowed the rupee to fall against the dollar. “This 10 per cent depreciation has added to our debt by 9.5billion dollars or nearly one trillion rupees. Every Pakistani today owes 130,000 rupees in debt,” she said.

Dr Nafisa Shah said the total debt and liabilities in June 2013 were 16.338 trillion rupees which increased by 10.476 trillion rupees during the last 4.5 years and reached to record 26.814 trillion rupees in December 2017.

As per State Bank of Pakistan, she said gross public debt to GDP is 63.5 percent; however, the independent economists question the credibility of GDP figures quoted by the Pakistan Bureau of Statistics and economists claimed that debt to GDP is around 70 percent.

Dr Nafisa Shah said the total External Debt in June 2013 was $60.899 billion, which increased by more than $25 billion during last 4.5 years and reached to $88.891 billion in December 2017. “With the devaluation of the rupee by 10 per cent in 100 days, we have increased our debt by $9.5 billion overnight, and we are now at $ 95 billion,” she said.

Second, she said the reserves were grown not through increase in exports, or investments or savings, but mostly through borrowing. Even those reserves are depleting fast.

The PPP Secretary Information said the SBP gross reserves were $19.65 billion after second quarter of FY2016-17 which declined by $3.89 billion and reached to $15.76 billion after second quarter of FY2017-18. The IMF, in its report stated that on February 14, Pakistan’s net international reserves were actually minus $724 million, as Forex liabilities stood at $13.5 billion against gross official reserves of $12.8 billion, with foreign debt expected to swell to $103.4 billion by June 2019.

Third, she said by strangulating the economy with high taxation, very high power tariff and by artificially manipulated rupee against dollar rate, the country is facing one of the most gaping current account deficits. “First time in the history, the imports went up to $52 billion leading to a trade deficit of $32 billion during the fiscal year of 2016-1,” she added.

Fourth, she said the government has not made full use of the CPEC. Instead of using this to boost production and industry, this has just been used for very expensive power projects, which have only added debt burden to the country.

Finally, She said privatisation has been a disaster. Instead of restructuring public sector entities they have just allowed them to accumulate debt. In the last meeting the secretary privatisation commission flatly refused to endorse the governments hurriedly designed--buy one get one free plan.

Dr Nafisa Shah said the PML-N lions roared that they would make Pakistan an Asian Tiger. “Instead, they have made Pakistan a client state dependent on largesse from friendly countries,” she said. She said after the completion of Extended Fund Facility Programme, the IMF has painted a bleak picture of the overall economy of Pakistan with special emphasis on foreign exchange reserves, current account deficit and the country’s capacity to meet its foreign debt obligations. “They have endorsed the fact that no reforms were carried out to take Pakistan on a sustainable economic recovery. It is feared that the nation is headed for another IMF bailout programme,” she said.