ISLAMABAD: Former federal minister and PML-N leader Ahsan Iqbal has claimed the PTI government has delayed the decision for seeking a loan from the IMF, so the monetary organisation has come in a position to dictate its conditions, knowingly that Islamabad had exhausted all other options.
In an interview with ‘The News’ on Wednesday, Ahsan Iqbal said, “If the government had made a timely decision to go to the IMF program, it could have negotiated to protect their interests but the incumbent regime did not take decision in its first year rule.
The government had decided to go to the IMF programme after exhausting all options, so the IMF dictated their policies. Finally, the government had allowed the IMF to impose all conditions and they had to accept them all.”
He said the fiscal space shrank, so first of all, they axed the development budget. The debt servicing got doubled from Rs1,500 billion to Rs2,900 billion because of increased interest rate, so the fiscal space deteriorated badly. “The decreased fiscal space also negatively impacted the execution of CPEC projects”, he added.
To another question for the CPEC in future, Ahsan Iqbal replied that after the CPEC, the ambassadors of USA, UK, Japan and others wished to become part of this CPEC, however, this investors’ confidence shattered because of the negative vibes given by the incumbent regime after 2018.
“Currently, 80 million jobs are relocating from China and if Pakistan gets its share of 6 to 7 million, so our youth could be employed”, he said.
It was unfortunate that Pakistan was no more an attractive destination for investment because of the weak macroeconomic situation, so we need to understand that our competition is with Vietnam, Laos, Myanmar and Bangladesh. He said if there would be elections and the country gets a stable government, then Chinese commitment would exist till 2030, so Pakistan could still get the benefits of CPEC by catching up with full force.
The former federal minister said the CPEC was a big gift for Pakistan and it was a game changer project as it comprised three phases from 2014-2030. Its first phase was aimed at filling the gap of infrastructure on the account of energy and infrastructure. When Pakistan provided help to NATO, Islamabad did not get any transit fee, so it deteriorated our roads infrastructure.
The Gwadar Port, he said, was not fully focused before the CPEC. In the first phase starting from 2014 to 2020, he said the infrastructure gaps were filled and connectivity between Pakistan and China would be improved. In the second phase from 2020 to 2025, both sides had agreed to boost industrial cooperation as nine Special Economic Zones (SEZs) were supposed to be commissioned by 2020. The industrial relocation from China has been underway in other parts of the world. The third phase from 2025-30 airms at developing regional linkages to integrate economies among South Asia, China and other parts of the world, he maintained.
Ahsan Iqbal said the PML-N led the government had utilised over $29 billion from 2014 to 2018 out of the total $46 billion committed under the CPEC.
A project, ‘Thar Coal’ has materialised with the help of CPEC and has provided financing as now the cheapest electricity was made available. The CPEC like mega projects could not be executed in a vacuum and such projects could only be materialised keeping in view macroeconomic realities. The fiscal space was created because of improved revenue collection, so the development budget was increased 300 percent from Rs300 billion to Rs1,000 billion during the PML-N led regime.
The CPEC was unfortunately stalled right now because first of all this incumbent regime made CPEC controversial as in the case of Multan-Sukkar Motorway, the communication minister made an allegation of Rs70 billion commission despite the fact that the Chinese government had selected the company of their choice to execute this project; so they blamed the Chinese basically and it discouraged the Chinese workers. Secondly, the development funding slashed down from Rs1,000 to Rs500 to Rs600 billion as the western route was supposed to be completed by Dec 2018, but it did not seem to have been completed even in 2021 because they were not doing required releases well on time.
In the second phase, under industrial cooperation, it was aimed at attracting business to business investments as macroeconomic instability proved disincentive for Chinese companies to come for investments, so these companies would go for destinations of their choice like Vietnam, Laos, Myanmar and others. He said the execution of CPEC projects was the responsibility of respective ministries.
