Rupee devaluation failed to yield desired results: Khurram

ISLAMABAD: Former minister for commerce Khurram Dastgir Khan has claimed the formula of devaluation of rupee against dollar for boosting up exports had failed to yield the desired results. He criticised the massive devaluation undertaken by the PTI-led regime and termed it devastating for Pakistan’s economy. He said mafias were manipulating key decisions related to sugar, smuggling of wheat, LNG imports and earned hundreds of billions of rupees at the cost of people of Pakistan.

The second formula of economics that failed in Pakistan was related to higher interest rates of 13.25 percent aimed at reducing inflation. “Devaluation does not increase exports and higher interest rate does not reduce increased prices and both these formulas failed in Pakistan,” Khurram Dastgir, former PML-N minister, said in an exclusive interview with The News on Sunday.

He criticised the incumbent regime and said that the government team comprises mafias and cited examples that they had resisted against increasing the prices of medicines as PML-N PM had refused and asked for exploring other options instead of allowing increase in prices of drugs and medicines. However, the PTI allowed a hike in medicine prices, he added. He said that the government granted permission for export of sugar but the PML-N-led government allowed limited export quantities such as 250,000 tons. This PTI govt allowed export of 1.1 million tons. It gave a signal that sugar would become short in the domestic market, he added. “It was directly cabinet policy-making failure resulting in the price increase from Rs50 to Rs110 per kg in the domestic market,” he maintained.

Then wheat was smuggled out because of flawed economic policy making, he said and added that these mafias earned hundreds of billions of rupees. He said that there were other factors required for boosting up exports, including supply of energy at reduced rates such as electricity and gas, simplification of taxation system and improved perception about Pakistan in the foreign world.

He said when Pakistan’s energy supply normalised and terrorism was controlled, it gave a message to the world that Pakistan was able to provide reliable export orders, so it helped to achieve double digit growth in exports. “Despite massive devaluation of 40 percent in the first year rule of the PTI-led regime, the exports could not get a quantum leap, rather it decreased,” he said.

He said that the last PML-N-led regime was blamed for increased current account deficit and rising debt burden as there was no other reason for blaming the last regime. He said the GDP growth was higher and inflation was in single digit. The bigger projects were undertaken through the CPEC. The stuck-up development projects such as Neelum-Jhehum, Kacchi Canal and others got completed in the last five years of PML-N led regime, adding the Thar coal project had kick-started.

The PM became victim of his own propaganda when the PTI came into power. When PM Imran Khan had announced that he would prefer suicide than going to the IMF for seeking loan, he had to take a U-turn on what he had uttered earlier. The disastrous step was massive devaluation that caused damage to Pakistan, he said.

Pakistan could not equalise incentives for boosting exports in the last five years of PML-N because of IMF conditions but when the Fund programme ended successfully, he had gone to PM to request him for providing rebate incentive packages for boosting exports.

He said that the exports could not increase during the fiscal year 2015-16 and 2016-17 because of recession in the international markets, energy shortages and perception of terrorist attacks. After the announcement of the package, the exports went up in double digits by 13 percent in dollar terms in 2017-18.

When asked why the PTI failed to fix the economy, he replied that the political economy remained a major cause of their failure as they tied themselves with the narrative that they would not undertake those steps that were taken by PML-N-led regime. It resulted into halting of development activities through the Public Sector Development Program (PSDP) as they did not lay down a single brick of development in the last two and a half year rule. So the productive public investment got choked, he maintained.

He said that the PDM undertook a new mission to stick to the Constitution while history taught some lessons as long marches reduced the credibility of the ruling regime. He said it was a challenge that the PDM movement did not have the backing of powerful elites.

He said that the PPP understood that compromises ultimately damaged it and this practice might continue for Sindh next time, so the real question arises what kind of country we want to give to our next generation. He said that the government registered two false cases against his 84-year-old father. However, he said that the PDM would resist against all such odds.