Thursday December 02, 2021

Miftah Ismail presents charge sheet against PTI govt

December 11, 2020

ISLAMABAD: Former minister for finance Miftah Ismail has declared the PTI government made blunders for simultaneously depreciating the massive exchange rate and jacking up the cost of electricity and gas, so the exports could not increase in the last two years and five month period.

He said that he would have gone to the IMF if the PML-N had won the last general elections but he would have never accepted such tough conditions imposed by the IMF as did the PTI led regime.

“I would have never accepted such high interest rates in my life. The devaluation to such an extent should have never been accepted. They made several mistakes. They accepted tough conditions despite getting $8 to $10 billion cushion from friendly countries such as China, Saudi Arabia and the UAE,” he said in an interview with The News last week.

He claimed that if there would have been no price hike, increased poverty and unemployment, the narrative of opposition Pakistan Democratic Alliance (PDM) would not have gained momentum among the masses. The masses, he said, knew they came into power through rigged elections, RTS had stopped but they committed plunder and people were asking how many palaces Jehangir Khan Tareen wanted to build and how many apartments Zulfi Bukhari wanted to get in London, so people of Pakistan were fed up with this so called “change”.

He said that the PML-N led regime by the end of its tenure allowed exchange rate adjustments of five percent by two times with pause of three months but the PTI made massive adjustments without having any policy. Simultaneously, they increased gas and electricity prices, so the cost of doing business went up and exports did not increase in the last two years and five month period.

He believed that the combination of measures could help increase exports, including exchange rate, but if the cost of producing goods had increased through jacking up gas and electricity prices, then massive adjustments of exchange rate could not help in increasing exports.

He took responsibility for allowing five percent adjustments each time during the twilight of PML-N led tenure but the PTI made massive and unbridled adjustments without having any policy, so it multiplied economic woes for Pakistan.

He said the government hiked the interest rate, so debt servicing had eaten away major resources of the country in the last two fiscal years. The higher interest rates, he said, also destroyed the country’s industrial and manufacturing sector. Now the economy shrank and nosedived from $312 billion to $264 billion, so Pakistanis became poor, he maintained.

To a query if the PML-N had won the last 2018 elections and if he would have taken the decision to seek a loan from the IMF, he replied that if he would have been given the responsibility, he would definitely have gone to the IMF as there was no other opinion on it.

When asked about the NAB case against him on the establishment of the terminal, he said that if the NAB could show one terminal more than cost of Engro, then he would consider himself and Shahid Khaqan Abbasi guilty. He said that Shahbaz Sharif constructed Metro Bus at the cost of Rs30 billion and now the BRT in Peshawar was constructed at Rs130 billion.

The ex-minister claimed sugar dacoity of Rs400 billion occurred when its export was allowed and wheat smuggled out with the help of Punjab Chief Minister Usman Buzdar. The Punjab government provided 0.8 million tonnes wheat as feed for cattle but there is no investigation from NAB. An absurd case was framed against Ahsan Iqbal as he was caught because he constructed a sports stadium at Narowal. But there is no investigation against Malam Jaba, sugar and wheat scandals and others issues.

“Their intentions are bad as they constituted the Debt Commission and if they were serious to ascertain the facts, then they should scrutinize the debt trap from 2006 to 2020. Now the debt to GDP ratio has worsened in the last two years and the Debt Commission mandate should be increased to ascertain the facts,” he added.

The NFC Award needs ratification, so it needs to be re-done. The property tax should be transferred from the provinces to the Centre. First evolve a consensus on the NFC, then talk about the 18th Amendment. Federal and parliamentary nature will not be altered. We will not accept the Presidential form of government.

The PDM campaign, he said, started yielding positive results as the prices of sugar had decreased and it was hoped that the prices of wheat/flour would also come down. The sugar and flour price will further go down by Rs10 per kg. The profits of Jehangir Khan Tarin and Khusro Bakhtyar will be decreased with a protest campaign.

While comparing the economic performance between PML-N and PTI, he said that Pakistan’s GDP growth was 5.8 percent during the last fiscal year of their rule in 2017-18. Inflation was 3.9 percent and the budget deficit was 6.5 percent. Interest rate was 6.25 percent and exchange rate was Rs125 against a dollar. The current account deficit, he said, stood at $18 billion or 5.5 percent of GDP. The size of the economy was $312 billion.

Now the growth rate has tumbled to negative 0.4 percent last fiscal year and they obtained more loans in the last two years than five years of PML-N. The development spending had halted and public development decreased. The interest rate had gone up as the debt servicing increased but the industrial sector was destroyed.

Regarding the Public Sector Enterprises (PSEs), he said he would hold Asad Umar responsible as he had claimed to stand with the workers of Steel Mills but now he seemed nowhere. Asad Umar should accept his mistake. The only solution is privatization including Steel Mills, PIA, power distribution companies and giant gas companies.