PML-N worse than PPP in managing economy: PTI

Asad Umar says debt projected to grow to $105b by 2020

ISLAMABAD:

Citing official figures in its white paper, the Pakistan Tehreek-e-Insaf on Thursday showed that the ruling Pakistan Muslim League-Nawaz’s economic management was worse than the Pakistan Peoples Party’s.

The PTI said the present government had failed on its promises of taxing the rich, breaking the begging bowl and ending the energy crisis.



The PML-N government has so far contracted $28.6 billion of fresh loans while the external debt is projected to grow to $104.6 billion by 2020, said the PTI’s financial wizard Asad Umar.

He said the country had been pushed into the debt trap and the government had contracted the most expensive external borrowings, phenomenally increasing the debt servicing cost.

Since June 2013, the government has added more than Rs4.7 trillion in public debt, putting every Pakistani citizen under a debt burden of Rs112,000 compared to Rs85,000 in May 2013, which is an increase of 31.8%, he added.

The $500 million raised through Eurobonds in September 2015 at an interest rate of 8.25% was the most expensive borrowing done by any country in the world in 2015. In comparison, Egypt raised $1.5 billion at 5.9% and Sri Lanka $650 million at 6.1%.



Umar said Eurobonds issued by the Musharraf government in 2007 were cheaper than 2015 bond borrowings. The citizens will repay this debt through higher taxes on essential commodities, he lamented.

Taxing the poor

The PTI leader said that contrary to the election slogan of taxing the rich, the PML-N government has provided a relief to the rich class.

He said that in 2013 the direct taxes to gross domestic product ratio, excluding withholding taxes, were 1.5%, which has slipped to 1.3% instead of showing any improvement.

Instead of broadening the tax base, the government has shifted the entire burden of taxes on the citizens through indirect taxes, he added.

In the fiscal 2014-15 indirect taxes, inclusive of WHT, stood at 9.7% of GDP. This ratio was 8.4% of GDP in the last year of the PPP government.

The government is reluctant to tax the powerful elite and reform the Federal Board of Revenue. “Despite tall claims made by the government, the facts show a rapid decline in investment and exports.”



The number of unemployed workers has increased sharply to more than 5 million – a net increase of over 1.5 million in just two years.

The government has given two official figures of unemployment. “In view of the planning commission, the unemployment rate is at a 13-year peak of 8.3% while the finance ministry insists that the rate is 5.9%.”

Umar said the investment position was better during the PPP tenure than in the first half term of the PML-N. “Investment remained stagnant at only 15% of GDP.”

He said private sector investment dipped to 9.7% in the last fiscal year, even lower than 9.8% recorded in the last year of the Asif Zardari government.

The farmers of the country have been caught between decline in prices of their product, increasing input costs and stagnant yields. “General sales tax rate on diesel has been raised to 51%, increasing the cost of agriculture production.”

He said the government had also failed on its biggest election promise – ending load shedding. Instead, power and gas shortfall have both increased to alarming levels at the mid-term of the Nawaz Sharif government, he added.

Published in The Express Tribune, January 15^th, 2016.