‘Economy is rudderless’: Captain of ship will have to be strong, says Shaukat Tarin

ISLAMABAD: The incoming chief convener of the Economic Advisory Council, Shaukat Tarin, has expressed strong concerns over the management and direction of the economy, saying no one is clear about which way the economy is headed.

Shaukat Tarin, who is a former minister for finance, while speaking on Geo News show ‘Aaj Shahzeb Khanzada Kay Sath’ on Thursday, said that the captain of the ship will have to be strong otherwise the ship will not sail forward.

He said that the interests of the country must be seriously considered before starting negotiations with the IMF. We made critical mistakes during initial negotiations, the former finance minister claimed.

Tarin said decisions regarding the economy need to be taken keeping in view the national and peoples’ interests. He said the tax-to-GDP growth must be 13-14pc. The economy suffered serious damage after the interest rate was allowed at over 13pc and exchange rate at Rs165, Tarin claimed. He said similarly by increasing the tariffs of power, gas and fuel, the demand has virtually been eroded, leading to economic stagnation and massive unemployment. All of this has proverbially broken the back of the people, who cannot be further pressurised. They have been further dealt a massive blow by coronavirus pandemic and its prevailing wave is very severe. He said when revenues are not growing and tariffs are increased, it only fuels corruption.

He said it is imperative to put the house in order and that is not possible without a strong skipper and once that happens, the IMF will agree to its terms, rather than the other way around. Tareen said we do not want to get out of the IMF programme but they must be convinced of the ground realities fueling our turmoil. The former finance minister said in the last two and a half years, no attention was paid to improve things. The state-owned enterprises must be put in order and since 2018, no effort was made to improve their management. He said that he had turned around the Habib Bank despite confronting lots of issues.

To a question, he told Shahzeb Khanzada that an Economic Advisory Council is being formed, which will be chaired by the prime minister and he will be its chief convener. Tarin said he was asked what position he would prefer to serve in, to which he said the high court has given a favourable verdict in the case against him, but the NAB has gone into an appeal against it. He said he can serve as finance minister if offered at the conclusion of NAB’s appeal.

He said if the power losses had dropped by five per cent and recoveries had improved by the same percentage, the circular debt would have begun to drop. The concept of investing in Pakistan is ideal but it cannot go ahead with the government playing a lead role, and suggested bringing experts from the private sector to correct the course. Businessmen must be assured that the NAB would not harass them and the NAB law must be balanced in order for the people to repose trust in it. Tareen said amendments made in the NAB law through a presidential ordinance were the right ones.