Economy to face biggest test when IMF programme ends: Humayun Akhtar

KARACHI: Former federal minister Humayun Akhtar has said the economy has improved somewhat over the past few months, and a major reason for this is the IMF programme, but the biggest test for the current situation would be when the IMF programme ends.

Akhtar was talking to Saleem Safi during an exclusive interview on Geo News programme ‘Jirga’. When he was asked which forum he is currently active in, or if he is still affiliated with “that party”, the ex-minister said that fortunately, he was not subjected to any hardship after the May 9 events.

“I was neither arrested nor told to hold a press conference. I’m son of a four-star general of the Pakistan Army who was martyred. When the incidents of May 9 occurred at the memorials of the martyrs, I distanced myself from the PTI. I remained silent.”

He said that when it was time for the elections, it was not impossible for him to contest them from Lahore because he had been involved in Lahore’s politics his entire life.

“I decided to contest from Faisalabad. My wish was to run as an independent candidate, but my colleagues suggested that I run from the IPP platform. I will contest future elections from the same platform.”

He also said the economy has improved somewhat over the past few months, and a major reason for this is the IMF programme, but the biggest test for the current situation would be when the IMF programme ends.

He pointed out that the foundations of industrial growth, such as steel, machine tools and petrochemicals, are not available in Pakistan. “Agricultural services and research are what will save us. You’ll see that when the IMF’s umbrella is removed, we’ll be standing back where we started from.”

He claimed that the best dam for the agricultural sector was the Kalabagh Dam, but who knows what will happen to it now. The dam currently being built in Pakistan will be good for power generation, he said.

“We don’t have any agricultural policy. It’s all left to Allah. Sometimes the sun shines, sometimes the rain comes on time, but no significant work has been done due to our policies.”

When asked what changes he is observing in Europe and America after Trump’s win in the US presidential election, Akhtar said there are two or three fundamental issues in America.

“They’ll make laws on immigration, etc. The judges were appointed during Trump’s first term. Duties on goods being imported in the US will be increased, which might lead to better growth for the American industry but could also increase inflation. Trump will likely prove to be better for the US economy.”

As for Europe, he said problems are being observed there. The intensity of the Ukraine war will not be the same as it was during the Biden era, he added.

He also said China would be taken more seriously. “A moment of reflection for Pakistan is that due to close relations between Pakistan and China, America might view Pakistan through the lens of China, which could create problems for us.”

From a regional perspective, he added, Pakistan is a nuclear power, so the US would focus on things like our economic conditions, internal situations, and especially the resurgence of international terrorism.

When he was asked how much weight there is in the issue of Imran Khan’s release being raised with Trump, the former minister said he does not know much about the nature of personal relationships between leaders.

He said the US Congress, the executive branch and the establishment have their own interests. “The problems faced by Imran Khan are based on Pakistan’s judicial system. Will they be asked to disregard the constitution and laws? The expectations linked to Trump regarding Imran Khan are unlikely to yield significant success.”

When asked if he was satisfied with the progress in the China-Pakistan Economic Corridor (CPEC), Akhtar said the infrastructure of CPEC had been developed and Pakistan’s motorway system was currently better than many countries of the world. He said a port had been established along with power plants and dams were also being built.

He was of the view that in the second phase of the CPEC, projects related to industries, agriculture and IT remained to be completed.

Akhtar lamented that special economic and technology zones could not be created despite talks that spanned many years. He said he often visited China and had partners in China and on the basis of his experience, he could tell that China would not be willing to invest in the absence of special economic zones.

He said the Chinese were also concerned about lack of political stability that was the biggest issue in economic growth. Political stability meant continuity in policies, Akhtar said. He also called for strengthening security as all foreign investors including Chinese considered lack of security the biggest issue.

When asked whether operation or negotiations were the solution to the security issue, Akhtar said it was a fact that since the United States left Afghanistan, the security situation in Pakistan had been deteriorating. He said the overall situation in Khyber-Pakhtunkhwa and Balochistan demanded strict decisions but some talks could also be held.

He said a major division had been created for the security of the Chinese citizens in Pakistan and by improving the SOPs for the Chinese citizens, incidents targeting the Chinese could be thwarted.

When asked to comment on some quarters’ claim that CPEC was a trap and Pakistan was going to repent over it, Akhtar said that according to the global statistics, the United States was the country with the most debt. He explained that what mattered the most was the ability to repay the loans. He added that Pakistan’s issue was that it was not able to repay the loans it had borrowed.

He said around $30 billion to $32 billion sovereign debt had been accrued in the phase 1 of CPEC and so far no such direct investment had taken place that could enable the country to earn foreign exchange. He added that he was also not seeing any such strategy that could result in joint agriculture, IT and other projects through which Pakistan could earn foreign exchange and repay its loans. On whether Pakistan was able to implement the second phase of CPEC, Akhtar said security was the biggest issue for the Chinese and Pakistan would succeed in ensuring security for the Chinese. He remarked that China was leaving labour-intensive industries like textile and going towards high tech industries like e-cars. He said the labour-intensive industry that was going out of China should be shifted to Pakistan through a joint programme of Pakistan and China. He said some special economic zones should be created for such programmes.On the possible solutions to the power issue, Akhtar said Pakistan had increased its power generation capacity but was lagging behind in power transmission. He added that no improvement was taking place in the power distribution companies and the issue of power theft persisted.

He said Wapda was not granted the required funds. He said four to five times more funds were spent when tariff was increased due to the IPP policies and taxes imposed to cover circular debt. To a query if there is no way other than to privatize the PIA, Akhtar said what other way could be there when the time to revamp the airline is over.

Answering another question if the current government will be able to complete its tenure, he said it’s difficult to make predictions about the next five months, let alone the next five years. He said it should not be considered who is supporting whom, and the government can prolong its stay in power if it really improves the condition of the people and the country. He reiterated that the government could complete its tenure it fully focused on solving problems of the people. When asked if the PTI, which is coming to Islamabad, will succeed, Akhtar said that many people in the party are making decisions. He said marching on the federal capital is something which has been made use of several times in the past. He added that in the past 10 years, marches and raids on Islamabad were staged, but political change cannot come through these tactics.

He said the PTI wants to boost its vote bank, but decisions like marching on the federal capital will not benefit the party. However, he remarked that the PTI is under compulsion to take such decisions, as the youth that supports the PTI had also backed Pervez Musharraf, who as a result had enjoyed power till 2007 and his popularity was also considerable.

Nonetheless, the PTI will not have the kind of vote bank that the PPP had enjoyed in Punjab and stayed alive there for 40 to 50 years, he said, adding that this class gets disappointed soon.

He was of the view that the PTI should instead make policies that while remaining part of the system it should improve its standing through future elections.

Akhtar said the PTI’s decision to march on Islamabad is beyond his comprehension. He said he has done politics in this country and his father was part of the establishment, and he can say that this kind of politics does not yield any positive results.

He recalled that in the Zia era, no room was given to the PPP, but time changes. When Musharraf came, both Nawaz Sharif and Benazir Bhutto were driven out of the country, he said, adding that this is the way politics in Pakistan is done.

Akhtar said politics requires patience and statesmanship. He admitted that no room has been given to the PTI, but violent protests will not benefit it.

He said that after each election, the opposition alleges rigging and claims the government has been formed with the support of the establishment. He said now a ‘hybrid plus’ system is being talked about, but there is no martial law in the country and a system does exist. He said the PTI, which thinks it has been besieged, can get a better result if it adopts some other method of protest.