ISLAMABAD: Pakistan Tehreek-e-Insaf (PTI) leader and former finance minister Shaukat Tarin has accused Finance Minister Ishaq Dar of taking economy to brink of default.
In response to the press conference of Ishaq Dar, Tarin said that in yesterday’s press conference, we had hoped that Ishaq Dar will do the honourable thing and hand over his resignation for misleading the nation, causing immeasurable suffering to the citizens through record-high inflation, and taking the economy on the brink of default.
He said on the day the exchange rate posted another record low of Rs262 to the US dollar, there were no clarifications from Dar, who used to boast that he will bring the dollar rate to below Rs200. The epic failure of his ‘dollar peg’ policy showcased again why we believe he is unfit for this job, with a complete lack of basic understanding of markets and economic policy.
The immeasurable loss to the economy as a result of the ‘dollar peg’ policy can be clearly seen in the economic data, with SBP reserves falling to $ 3.7bn (20th Jan), which is hardly three weeks of import cover. Dar has brought the economy to the brink of a default, with exports declining 7%, remittances declining by 11% and FDI down 59%.
Tarin said it is not just the PTI that has criticized the epic failure of the PDM government policies but even our bilateral and multilateral development partners that have refused to provide financial assistance to the failed policies of the PDM government. Even their own party members including former Finance Minister Miftah Ismail have criticized Ishaq Dar and admitted that Pakistan suffered “a big loss” due to his policies.
He said: “We had warned beforehand that the PDM government and their ‘munshi’ Ishaq Dar are unfit for the job. The fixation of Ishaq Dar on a ‘dollar peg’ is not only a reflection of a poor understanding of economic policymaking but also a reflection of a fragile ego trying hard to justify occupying an office that is too big for his shoes.”
During 2013-2018 period, the economy paid a heavy price because of the ‘dollar peg’ with exports plummeting from $ 24.8bn in 2013 to $ 22bn in 2017. During the same time, Bangladesh’s exports increased from $ 29bn in 2013 to $ 38bn in 2017. An estimated loss of $ 10bn was incurred to the economy as a result of the decline in exports as a result of the Dar peg, he said.
In 2022, the same experiment by Ishaq Dar has resulted in the exports declining by 7%. This clearly shows that Ishaq Dar has not learned any lessons from past mistakes and is unfit for this job, he said.
Tarin continued: “To hide his colossal failures Ishaq Dar likes to throw around random numbers and desperately spin fairy tales. In yesterday’s press conference, the Finance Minister spun a fairy tale of Pakistan becoming the 24th biggest economy in the world under his capable leadership in 2018. Subsequently, he claimed that the economy had shrunk to become the 47th largest economy in the world by 2022.
“This is not the first time Ishaq Dar has thrown these bizarre statistics in public. Initially, we believed he was making up random numbers, as no credible public or private institution uses or quotes such rankings.”
ShaukatTarin said on doing some research, we found out that Wikipedia publishes a global GDP ranking. According to the 2022 rankings, Pakistan’s GDP on a PPP basis was ranked 23rd in the world. So not only did Finance Minister deliberately lie in his press conference, the fact that he uses these mumbo jumbo statistics reflects utter desperation to hide the failures of his policies in the last term and today. We must ask the question, is Ishaq Dar fit to hold the office of the Finance Minister?
Tarin said under the Imran Khan government, the economy was expanding at 6% for the second consecutive year with record exports, record large-scale manufacturing output and record output of agriculture crops.
The agricultural sector posted growth of 4.4% in FY22, which is the highest posted since FY05. This was driven by 6.6% growth in major crops, the highest since FY05. The large-scale industries posted a record growth of 11.7% in FY22, the second consecutive year of 11% + growth. The economy was booming with record exports of $ 32bn in FY22; credit to the private sector grew by 22%.
However, under the PDM government, the economy has nosedived and SBP now estimates that GDP growth will slow down to just 2% in the current year, compared to 6% under the PTI government, he said.
Tarin added due to the draconian tax measures and the restrictions on imports, the manufacturing sector output has nose-dived and in the first five months posted a -3.6% contraction. 20 (out of 25) industries posted sharp double-digit negative output.
He said no only will the economy not create job opportunities for 2mn youth entering the workforce every year, but according to various estimates nearly 10 million workers are at risk of being laid off. According to PBS data, PTI government created 1.84mn jobs every year (2019-2021). In comparison PMLN created only 1.1mn jobs and PPP 1.4mn jobs every year.
About inflation, he said the PDM has unleashed a tsunami of inflation that has never before been recorded in our 75-year history. Already inflation has averaged 25% in the Jul-Dec FY23 period, compared to inflation of 10.8% under the PTI government (Jul to Mar FY22). Now with the depreciation of rupee, a second wave of inflation tsunami has been unleashed. Experts including Dr Hafiz Pasha have warned that inflation will rise to 35% in the days ahead due to measures of the PDM government.
He said under PDM government, average electricity prices for consumers have been increased by 100%. They promised to reduce prices before VONC. Imran Khan kept petrol and diesel prices at Rs 150/ litre, by reducing GST and PL to 0%. PDM has raised petrol prices to Rs 214/ litre. This includes a record Rs 50/ litre tax (PL). With recent devaluation, new prices will rise to Rs 260. Diesel prices are now expected to rise to Rs 290 due to recent devaluation and PL of Rs 50/litre.
He said according to the latest report by PBS, prices of wheat flour has increased to Rs 91 per kg in Jan 2023, an increase of 56% from Rs 58 per kg in March 2022. According to media reports, the actual prices faced by consumers are even higher at Rs 140-160 per kg, indicating an increase of nearly 175% in the prices of flour since the VONC. Chicken prices have increased to Rs 650kg in Jan 2023, compared to Rs 288 in March 2022, an increase of 125%. Onion prices have increased by a whopping 500% to Rs 240/kg in Jan 2023, compared to only Rs 40/kg in March 2022.
Copyright Business Recorder, 2023
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