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Govt unaware of true extent of ongoing economic crisis: Miftah Ismail

  • Pakistan has always managed to avert issues and this is why the current plight is being treated 'like any other', says former finance minister
Omar Qureshi
May 18, 2023

KARACHI: Former finance minister Miftah Ismail said on Thursday that the government is unaware of the true extent of the ongoing economic emergency because “Pakistan has been facing a crisis persistently”.

Speaking at an event titled ‘Pakistan’s Financial Crisis and a Way Forward- A Pre-Budget Discussion’ at the Salim Habib University in Karachi on Thursday, he said Pakistan has managed to escape and avert its economic issues in the past, and this is why the current situation is being treated “like any other”.

“Pakistan does not have enough revenue to pay interest on previous loans,” said Ismail at a gathering of academics, students, and members of the business community.

“It is taking new loans to cover the interest payments of old ones. When a country borrows to repay old interest, then that debt is unsustainable.”

Ismail, the finance minister to successfully negotiate the combined seventh and eighth reviews with the International Monetary Fund (IMF) before being unceremoniously removed to make way for Ishaq Dar, stated that the net tax revenue of Pakistan was insufficient to cover interest payments.

Ismail stressed that the IMF was not the root of Pakistan’s economic problems, but it was “rather the successive leaderships of the country”.

“Our problems are self-created. We have been unfair with Pakistan,” he said. “While inflation rose throughout the world, it surged at a steep pace in Pakistan.”

He pointed out that India and Bangladesh had a lower inflation reading than Pakistan. “All inflationary pressures cannot be connected to global rise in prices.”

According to him, Pakistan made errors in policy making.

“I blame myself too. Our leadership is the worst in the world.”

Ismail has been campaigning for a major overhaul in Pakistan for some time including the privatisation of loss-making state-owned entities, education sector revamp as well as population control.

His remarks come as Pakistan remains engaged in talks with the IMF over revival of its stalled bailout programme.

‘World Bank, IMF not responsible to run Pakistan’

The former finance minister stated that the World Bank and IMF were not responsible to run Pakistan and should not be blamed for the country’s economic ills.

“China has given us 4-5 bailouts while the UAE and Saudi Arabia have helped us from time to time. Pakistan has nothing to show for it,” he said.

“We go to the IMF because no nation wants to give loans to us and IMF demands structural reforms,” he said, expressing regret that the country violated the current IMF programme for a third time.

He was of the view that Pakistan will have to go to IMF for a 24th time as the country will default without it.

Currency devaluation

While accepting that Pakistan’s debt payments were piling up due to a depreciating rupee, Ismail held the view that currency’s slide was not a loss for the country.

“Our imports are $20 billion more than exports and remittances combined therefore, currency devaluation is used to put a stop on inward shipments,” he said. “If this is not done, then Pakistan would be buying for the current generation at the cost of future ones.”

He underlined that importing at an overvalued currency would build pressure on future generations.

IT exports

When asked why Pakistan was lagging behind in IT exports, he noted that there was a problem with the education system.

“India made 5 institutes of technology within 10 years of its independence,” he said. “Pakistan’s education system cannot compete with India’s.”

Pakistan’s low quality of education is also an economic problem, he said. He also cited that spending on education was insufficient and the mechanism for spending was flawed as well.

Ishaq Dar has inflicted huge financial dent to Pakistan: Miftah Ismail

“The country is far behind in business process outsourcing (call centres) because no foreign investor wants to pour money in Pakistani market.

“The only foreign investment that comes to Pakistan is for local consumption and not for exports,” he said. “We are not an ideal destination for foreign investors.”

He also lamented that the business ecosystem of Pakistan took a dent on May 9 following the outbreak of protests and riots. This discouraged foreign investors who were in Pakistan at that time, he said.

He also regretted that the Dhaka Airport alone hosted more airlines than Karachi and Islamabad airports combined.

Talking about the ongoing political instability in Pakistan, Ismail said the Arab Spring was also one such crisis and people of the affected country expected that it would lead their nation to prosperity but this did not happen.

“Instead, the nations went from the frying pan into the fire,” the former finance minister emphasised.

He noted that “Pakistan’s leadership needed to be reformed” to bring a change in the country’s fortune.

Recommendations
He underlined the need to enhance competition between provinces to enable them to perform better. The former finance minister called for further devolution of federal institutions to provinces. He stated that the US followed this model and its states performed better economically.

The former minister advocated raising the minimum wage in the upcoming budget, stressing that “35% inflation makes it mandatory”.

He also called for a meeting of all political stakeholders of Pakistan to debate what policies to follow to drag the country out of economic quagmire.
 
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Govt unaware of true extent of ongoing economic crisis: Miftah Ismail

  • Pakistan has always managed to avert issues and this is why the current plight is being treated 'like any other', says former finance minister
Omar Qureshi
May 18, 2023

KARACHI: Former finance minister Miftah Ismail said on Thursday that the government is unaware of the true extent of the ongoing economic emergency because “Pakistan has been facing a crisis persistently”.

Speaking at an event titled ‘Pakistan’s Financial Crisis and a Way Forward- A Pre-Budget Discussion’ at the Salim Habib University in Karachi on Thursday, he said Pakistan has managed to escape and avert its economic issues in the past, and this is why the current situation is being treated “like any other”.

“Pakistan does not have enough revenue to pay interest on previous loans,” said Ismail at a gathering of academics, students, and members of the business community.

“It is taking new loans to cover the interest payments of old ones. When a country borrows to repay old interest, then that debt is unsustainable.”

Ismail, the finance minister to successfully negotiate the combined seventh and eighth reviews with the International Monetary Fund (IMF) before being unceremoniously removed to make way for Ishaq Dar, stated that the net tax revenue of Pakistan was insufficient to cover interest payments.

Ismail stressed that the IMF was not the root of Pakistan’s economic problems, but it was “rather the successive leaderships of the country”.

“Our problems are self-created. We have been unfair with Pakistan,” he said. “While inflation rose throughout the world, it surged at a steep pace in Pakistan.”

He pointed out that India and Bangladesh had a lower inflation reading than Pakistan. “All inflationary pressures cannot be connected to global rise in prices.”

According to him, Pakistan made errors in policy making.

“I blame myself too. Our leadership is the worst in the world.”

Ismail has been campaigning for a major overhaul in Pakistan for some time including the privatisation of loss-making state-owned entities, education sector revamp as well as population control.

His remarks come as Pakistan remains engaged in talks with the IMF over revival of its stalled bailout programme.

‘World Bank, IMF not responsible to run Pakistan’

The former finance minister stated that the World Bank and IMF were not responsible to run Pakistan and should not be blamed for the country’s economic ills.

“China has given us 4-5 bailouts while the UAE and Saudi Arabia have helped us from time to time. Pakistan has nothing to show for it,” he said.

“We go to the IMF because no nation wants to give loans to us and IMF demands structural reforms,” he said, expressing regret that the country violated the current IMF programme for a third time.

He was of the view that Pakistan will have to go to IMF for a 24th time as the country will default without it.

Currency devaluation

While accepting that Pakistan’s debt payments were piling up due to a depreciating rupee, Ismail held the view that currency’s slide was not a loss for the country.

“Our imports are $20 billion more than exports and remittances combined therefore, currency devaluation is used to put a stop on inward shipments,” he said. “If this is not done, then Pakistan would be buying for the current generation at the cost of future ones.”

He underlined that importing at an overvalued currency would build pressure on future generations.

IT exports

When asked why Pakistan was lagging behind in IT exports, he noted that there was a problem with the education system.

“India made 5 institutes of technology within 10 years of its independence,” he said. “Pakistan’s education system cannot compete with India’s.”

Pakistan’s low quality of education is also an economic problem, he said. He also cited that spending on education was insufficient and the mechanism for spending was flawed as well.

Ishaq Dar has inflicted huge financial dent to Pakistan: Miftah Ismail

“The country is far behind in business process outsourcing (call centres) because no foreign investor wants to pour money in Pakistani market.

“The only foreign investment that comes to Pakistan is for local consumption and not for exports,” he said. “We are not an ideal destination for foreign investors.”

He also lamented that the business ecosystem of Pakistan took a dent on May 9 following the outbreak of protests and riots. This discouraged foreign investors who were in Pakistan at that time, he said.

He also regretted that the Dhaka Airport alone hosted more airlines than Karachi and Islamabad airports combined.

Talking about the ongoing political instability in Pakistan, Ismail said the Arab Spring was also one such crisis and people of the affected country expected that it would lead their nation to prosperity but this did not happen.

“Instead, the nations went from the frying pan into the fire,” the former finance minister emphasised.

He noted that “Pakistan’s leadership needed to be reformed” to bring a change in the country’s fortune.

Recommendations
He underlined the need to enhance competition between provinces to enable them to perform better. The former finance minister called for further devolution of federal institutions to provinces. He stated that the US followed this model and its states performed better economically.

The former minister advocated raising the minimum wage in the upcoming budget, stressing that “35% inflation makes it mandatory”.

He also called for a meeting of all political stakeholders of Pakistan to debate what policies to follow to drag the country out of economic quagmire.

@RescueRanger

Basically what I said in the other thred about no money and none want to give among other things.

Eventually, a time comes a person speaks the truth. I will say this is a good article.

But even he's not saying out loud many things so as to not scare people off the true reality.
 
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July-April: Textile group exports dip 14pc to $13.7bn YoY

  • Textile group exports witnessed a decline of 29.11 percent in April 2023 on a year-on-year basis
Tahir Amin
May 21, 2023

ISLAMABAD: The country’s textile group exports declined by around 14.22 per cent during the first 10 months (July-April) of the current fiscal year 2022-23 and remained at $13.709 billion as compared to $15.981 billion during the same period of last year, the Pakistan Bureau of Statistics (PBS) said.

The data of exports and imports released by PBS revealed that the country’s textile group exports witnessed a decline of 29.11 per cent in April 2023 on a year-on-year basis and remained at $1.232 billion when compared to $1.739 billion during the same month of last year.

On a month-on-month (MoM) basis, textile group registered 1.99 per cent negative growth compared to $1.257 billion in March 2023. Cotton yarn exports registered 36.71 per cent negative growth in July-April and remained $636.831 million compared to $1.006 billion during the same period of the last year. On a year-on-year basis, cotton yarn exports registered 34.72 per cent negative growth, while on a MoM basis, it registered 6.35 per cent negative growth.

Rice exports declined by 11.17 per cent during the first ten months of 2022-23 and remained $1.822 billion compared to $2.052 billion during the same period of the last fiscal year.

The country’s exports during July–April 2022-2023 totalled $23.181 billion (provisional) against $26.247 billion during the corresponding period of last year showing a decrease of 11.68 per cent. The exports in April 2023 were $2.137 billion (provisional) as compared to $2.372 billion in March 2023 showing a decrease of 9.91 per cent and by 26.23 per cent as compared to $2.897 billion in April, 2022.

Main commodities of exports during April 2023 were knitwear (Rs91,685 million), readymade garments (Rs70,504 million), bedwear (Rs62,129 million), rice others (Rs45,153 million), cotton cloth (Rs41,799 million), towels (Rs22,679 million), rice basmati (Rs18,634 million), cotton yarn (Rs18,165 million), fish and fish preparations (Rs14,547 million), and madeup articles (excluding towels and bedwear) (Rs14,344 million).
 
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Where is media??? Dollar crosses 300. Inflation is at peak. People are dying. Looks like media is completely controlled by powerful institution.
No one talk against PDM policies
 
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Indus Motor announces another plant shutdown

BR
July 20, 2023

Indus Motor Company (IMC), the assembler of Toyota vehicles in Pakistan, has once again announced that it will shut production citing raw material and component shortages. This time production will be suspended from July 21 to August 3.

The automaker shared the development in its notice to the Pakistan Stock Exchange (PSX) on Thursday.

“The company and its vendors continue to face hurdles on import of raw materials and receiving clearance of their consignments, on account of challenges in opening of LCs and supply issues by certain foreign vendors,” the company said in the PSX statement.

“This has disrupted the supply chain of the company and the vendors are unable to supply raw materials and components to the company,” it added.

“Accordingly, the company has insufficient inventory levels to maintain production, therefore the company is unable to continue its production activities.

“In view of the above, the company has decided to completely shut down its production plant from July 21, 2023 to August 3, 2023 (both days inclusive),” it added.
 
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The numbers don’t tell the whole story.
Inflation and joblessness has made many people turn to terrible behaviors.

P.s. I have been informed this is a video from 2018. One can only think how bad it must be now
This has less to do with hunger and poverty. This has more to do with the moral and ethical degradation of the nation.
 
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Increase in petrol and Diesel prices
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