No plan B other than IMF: Miftah Ismail

As Pakistan's economy continues to dwindle amid financial woes and the authorities struggle to strike a staff-level agreement with the International Monetary Fund (IMF), former finance minister and Pakistan Muslim League-Nawaz's (PML-N) Miftah Ismail said matters with the global lender seem to have come at a standstill.

The cash-strapped country has faced growing economic challenges, with high inflation, low forex reserves, a widening current account deficit and a depreciating currency.

"The government did everything it could to keep up with the IMF," he said, when speaking during Geo News show 'Aaj Shahzeb Khanzada Kay Sath'.

He added that there is no plan B other than the IMF in his view.

Miftah, when commenting on securing funds from friendly nations, said that Pakistan must conduct high-level diplomacy with Saudi Arabia and the United Arab Emirates.

“At the moment, Pakistan is in dire need of Rs5 billion to Rs6 billion,” he added.

Miftah further stated that if Pakistan defaults, it will not even be good for the world.

Commenting on the IMF’s concern with Islamabad about providing subsidy to smaller vehicles and motorcycles, Miftah said that the Washington-based lender’s question on the matter is valid.

However, he also mentioned that Pakistan, too, has the answer to their query on fuel subsidy.

Earlier this week, the federal government had decided to subsidise petrol up to Rs100 to motorcyclists and owners of vehicles up to 800cc — in its bid to provide relief to the inflation-hit masses.

“Prime Minister Shehbaz Sharif has directed to provide subsidy on petrol to low-income people up to Rs100 per litre,” Minister of State for Petroleum Musadik Malik had said.

Earlier, it was decided to provide a subsidy of Rs50 per litre.

The minister had said under a comprehensive strategy, subsidised petrol will be available to motorcyclists and owners of vehicles up to 800cc.

Malik had further said owners of vehicles above 800cc would be charged full price.

He had said the decision to provide fuel at subsidised rates will be implemented within six weeks, adding that the government will make petrol cheaper for the poor.

Meanwhile, the IMF's Resident Representative for Pakistan Esther Perez Ruiz, when reacting to the news of petrol subsidy, had said that the global lender was not consulted by Islamabad before it planned to increase fuel costs for wealthier drivers in order to pay for a subsidy for the country's lower-income population.

“Fund staff are seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities,” Ruiz had said.