ISLAMABAD: Punjab’s former finance minister and PMLN MNA Aisha Ghous Pasha said that the IMF programme was moving towards suspension because the government might not be able to implement major conditions of the Fund-sponsored programme in the upcoming budget.
“The government wants to get the support of the IMF so that it can get loans from other multilateral creditors through comfort letter. The Fund programme is moving towards suspension if the government does not implement conditions in the upcoming budget,” PMLN MNA and renowned economist Aisha Ghous Pasha said while talking to The News on Saturday.
She said there is a difficult situation for the government because if it implemented the IMF conditions, including hike in electricity tariff by 30 percent, fetching additional revenues by Rs one trillion, and ensuring autonomy to SBP and NEPRA then political revolt could occur in Pakistan.
She said that there were highly optimistic projections of this government and even the SBP, whereby they projected that the inflation would come down in Pakistan. I am unable to understand how the inflation will come down in our country, she questioned?
While comparing the development spending in Punjab during the PMLN period and PTI-led regime, she said the utilisation of development spending in Punjab stood at 470 billion in 2017-18 and then it decreased to Rs 242 billion next year in 2018-19 under the PTI-led regime, witnessing a decline of 50 percent.
She said the PMLN increased the development spending by 25 percent every year in its five-year rule as it increased from Rs 196 billion in 2013 to Rs 470 billion in 2017-18.
While quoting Pakistan Social and Living Standard Measurement (PSLM) Survey for 2019-20 done by the Pakistan Bureau of Statistics (PBS), she said that out of 36 districts in Punjab, 15 districts were highly developed on account of four indicators, including education, health, living standard and information technology.
There are 18 districts that are highly developed and three districts were medium developed in Punjab. There is no single district in Punjab which was declared as low developed, including southern Punjab, she added. There are five districts of Sindh which were declared low developed, seven districts of KP, and 15 districts of Balochistan.
Punjab has been declared as most developed province first time as earlier Sindh had clinched this position because of development in Karachi, she added. About reasons for declined governance, she said that there were major flaws in policy making and execution as it seemed that kids were running the economy of the country.
The devaluation was done in haste and the discount rate hiked it resulted in doubling the debt servicing. The short-term debt was converted into long-term. She said there was no homework done when the incumbent government had come into power. Secondly, the arrogance stopped them to form a good team on the economic front. Thirdly, the bureaucrats got scared as sword of NAB was hanging over their heads. They did not allow anyone to work in calm atmosphere as several finance ministers and secretary finance got changed.
She said the PMLN should have adjusted exchange rate under its tenure as was done by former finance minister Miftah Ismail. This government, she said, went to IMF without having proper homework. Then the secretary Finance and the Governor SBP was asked to leave when signing of the IMF programme was around the corner.
She reminded that when Opposition Leader Shahbaz Sharif had offered the Charter of Economy in his maiden speech but this opportunity was lost because of lack of vision of the incumbent regime.
She said that the net revenues of the federal government after paying share to provinces could not meet two major expenses heads, including debt servicing and defense. The debt servicing has doubled because of the exchange rate depreciation and discount rates, she added. This was not the situation three years back under PMLN-led government.
The per capita income had declined under PTI-led regime as it was on much higher side but it got crashed in last three years. If population census 2017 was taken into account then the per capita income in dollar terms had declined to over $1,300. The GDP growth rate was standing at 5.5 percent in revised estimates in 2017-18 then the GDP nosedived to 2.1 percent. They failed to control inflation, especially food inflation. The food inflation is on higher side than general inflation, she maintained.
The unemployment has gone up as life standards deteriorated, she said. If the GDP growth rate remained at 3.94 percent so the recovery was standing at 1.8 percent against the population growth of 2.4 percent so masses were feeling pinch.
The growth rate, she said, was coming from wholesale and trade and transportation as these sectors were lying into informal sector but little bit growth came from small and medium enterprises.
The agriculture growth was also overstated but they were not counting property decline in cotton production. The USDA’s data obtained through satellite images also showed less production of wheat in Pakistan was on lower side and now the government made the country food insecure country, she added.
She said Finance Minister Shaukat Tarin accepted past mistakes of last two years and it should be appreciated as he made right kind of diagnosis. She said the finance minister wanted to give right direction to the economy but it was yet to see how he implemented his strategy to put the economy back on the right path.
