Pakistan Muslim League-Nawaz (PML-N) leader and former finance minister Miftah Ismail on Monday observed that the economic policies of the Pakistan Tehreek-e-Insaf (PTI) government were a “total failure” saying the “confused” ruling party had turned the economy “upside down” and had pulled the country into recession, rendered over three million people jobless and increased poverty.
He credited the previous Nawaz league government for “maintaining stability” in the country’s economy and acquiring loans from friendly countries on soft conditions.
"Our (PML-N) government had initiated talks with China to acquire $2 billion loan and with Saudi Arabia for $3 billion," Ismail said while talking to The Express Tribune.
He remembered that the Citibank had also offered a loan of $2 billion in loan to the PML-N government in 2018.
He said by the time the PTI government had come to power and the countries extended the bailout packages to support Islamabad sail out from the then financial crisis.
"Citibank had offered to lend $2 billion to Pakistan against swap with rupee in May 2018 (a few days or weeks before the interim government was setup to hold general elections in July 2018)," he said.
"I did not accept [the loan] as the bank had offered the swap arrangement at an expensive interest rate of 8%," Ismail said who is a PML-N by-election candidate in NA-249 constituency, Karachi.
The polls in the said constituency will be held on April 29.
The NA seat remained vacated since PTI's Faisal Vawda resigned after casting his vote in Senate elections last month.
Miftah said the “confused” PTI government had turned the economy “upside down” during the first three-year of its rule.
“PML-N handed over it [PTI] an economy which was performing very well and grew by 5.8%. The inflation reading stood low at 3.9% in the last year of the five-year elected rule in 2018,” he said.
The PML-N leader observed that “in the name of so-called fixation of the economy” the incumbent government had “pulled the country into recession, rendered over three million people jobless and increased poverty”.
He said the measures taken by the ruling party increased inflation close to average 9%, depreciated rupee against dollar exorbitantly and pushed the benchmark interest rate at 13.25% in 2020.
"A continued growth momentum and expansion in the economy was a must to create new job opportunities rather than controlling current account deficit," Ismail said.
"PTI government has brought about recession in the economy in order to hurt the PML-N reputation," he added.
Ismail maintained that the ruling party had failed to resolve the issues of Karachi while the Pakistan Peoples Party failed to deliver for over 13 years.
"Lack of drinking water remained the single largest issue in NA-249 constituency. I promise to resolve the issue," Ismail said.
He noted that the current account deficit was just 5.5% of GDP (Gross Domestic Product) or $20 billion, in fiscal year 2018.
"We had inherited comparatively a larger current account deficit in terms of percentage of GDP… when Musharraf quit the government in 2008. We acquired a loan from International Monetary Fund (IMF), continued to accelerate economic growth and still kept inflation reading low during our rule (2013-2018)," he said.
At present, the PTI has turned around the balance of current account into surplus through curtailing imports rather than increasing exports, he said.
"It was no magic. Anyone can control current account deficit by cutting imports. The real job was to control it through increasing exports which have remained below the 2018 level of $24.78 billion," Ismail said who is also the general secretary of PML-N Sindh.
“PTI policies have ruined the economy. The country may not achieve an economic growth of over 1-1.5% this year (FY21) as well.”
Ismail stated that the PTI government had also suspended China-Pakistan Economic Corridor (CPEC) projects and ceased accepting the significant and valuable investment from China "which became a cause of recession (GDP grew negative 0.4% in FY20)."
"They (PTI) have yet not attracted half of the investment under CPEC compared to what we (PML-N) had brought from China during our rule."
The PML-N leader expressed surprise how the PTI ministers and other officials including Asad Umar and SAPM Abdul Razak Dawood used to claim that Pakistan was on the verge of default, which was “not true”.
“How elected people misguided the public. Pakistan has never defaulted throughout its history,” he said.
"When Asad Umar was president of Engro Corporation it was being run on huge debt. Did Asad make such claims about Engro that it was on the verge of default? Never. Similarly, did Razak Dawood say Descon was on the verge of default when it was facing tough financial times? No. Then how and why they used to make such false claims about my country?" he asked.
Ismail said Pakistan did not default despite a year delay in acquiring a new IMF loan programme by the PTI government.
"However, the negative propaganda about the country that it was on the verge of default agreed financial institutions to withdraw financing lines from Pakistan."
The total debt of the country had risen by 40% during the three-year rule of the PTI government, which is unprecedented in the country’s history, he said.
The PML-N leader further noted that the increased supply of money by printing new currency notes was partly causing high inflation in the domestic economy.
"The government should control printing new currency notes to control inflation."
He said the rupee should have not been depreciated by over Rs125 to the US dollar. However, the PTI government took it to Rs168 and now appreciated it back to Rs153 over the past one-year, he added.
"The recovery in rupee suggests they had unnecessarily panicked… to pull the rupee down to Rs168."