PTI, govt in verbal slugfest over IMF deal

Tarin says conditions for loan ‘harsh’; Ismail claims it is aftermath of PTI’s doing


Salman Siddiqui September 03, 2022
Former finance minister and PTI leader Shaukat Fayaz Ahmed Tarin (L) and Federal Minister for Finance and Revenue Miftah Ismail (R)

KARACHI:

The former ruling Pakistan Tehreek-e-Insaf and the incumbent federal coalition government on Saturday engaged in a war of words after the former termed the acceptance of conditions set forth by the International Monetary Fund (IMF) for the recently released $1.1 billion loan tranche “harsh”.

PTI Senator Shaukat Tarin urged the federal government to renegotiate the loan deal with the global money lender in the wake of the devastating floods, adding that importing cheap oil from Russia was also a better option.

“Pakistan was all set to get rid of the IMF loan programme in September, but the PML-N coalition government got it extended on harsh conditions which have resulted in pulling growth into the negative zone in the first two months (Jul-Aug) of the current fiscal year 2023,” Tarin said while addressing a news conference at the Karachi Press Club.

Tarin criticised the federal government for its poor economic policies, saying: "The power tariff is set to hit as high as Rs50 per unit [which will increase the burden of the already down-trodden people of the country].”

Read  'Below-the-belt act': Miftah lambasts PTI leaders after audio leak

In response to Tarin’s remarks at a separate news conference in the federal capital, Finance Minister Miftah Ismail claimed that the former finance minister’s statements differed from facts.

Ismail said that the PTI made agreements with the IMF to make electricity and oil more expensive, the effect of which continued even during “our government’s tenure”.

He claimed that the PTI government raised Rs19,000 billion in loans during its term in power.

However, the electricity price spiked to Rs38 per unit at present as compared to Rs16 per unit about a year ago in August 2021 when the PTI government was in power at the Centre.

Tarin told the media persons that the IMF was now criticising the PTI for its pro-people policies as compared to the times when it used to praise it till December 2021 and January 2022 when it was in power at the Centre. "We used to take a stand to protect our people in front of the IMF."

The IMF revived its loan programme for Pakistan last week. It extended the size of the total loan to $6.5 billion till June 2023. The original programme of $6 billion began in July 2019 was to end in September 2022.

Tarin, who is also the former finance minister, said the incumbent government had also agreed with the IMF to increase gas price by an average of 53% for all consumers and by up to 235% for various category of consumers.

PTI spokesperson Muzammil Aslam, who accompanied Tarin during the conference, said the government would fail to implement the tough IMF conditions, claiming that the loan programme would be suspended again in the near future.

Tarin urged the government to urge the IMF to soften its harsh conditions to provide relief to the people in these testing times as “floods have badly impacted over 30 million people in different parts of the country and the calamity is not yet over”.

He said all the political parties should be on the same page to fight against floods and help rehabilitate the people.

On PTI Chairman Imran Khan raising Rs5.5 billion within hours at a telethon the other day, Tarin said, "The funds were not only for the affected people of Punjab and Khyber-Pakhtunkhwa, but also for all the affected people of Sindh and Balochistan."

Read more Govt's prudent policies saved the country from default, says Miftah

He also offered the government to work together in convincing the IMF to ease the harsh conditions. “It should relax its conditions like no more increase in energy prices and rise in rate of taxes including petroleum development levy and sales tax on petroleum products.”

He recalled that they had compelled the IMF to agree to relax its conditions during the Covid-19 pandemic.

"Finance Minister Miftah Ismail is a good man," Tarin said. "He (Ismail) has, however, assured the IMF of imposing 17% sales tax on petroleum products in case the government failed to collect the targeted taxes at a time when the county is facing a historical flood and inflation reading has hit 47-year high at 27.3% in August."

The government should import wheat and oil from Russia which is offering the goods at 30-40% discount. This would help in cutting the energy prices and providing relief to the people in these testing times.

"You should write letters to the US and convince it that floods are the single largest issue in Pakistan at present and we need to give relief to our people."

He said industries are being closed due the government's poor economic policies in liaison with the IMF conditions, while floods have washed away a large part of agriculture output in the country.

Talking on his leaked controversial audio in which he suggested Punjab and K-P finance ministers to write letters to the IMF, he said it was a "distorted audio”. “The people who leaked the audio wanted to sabotage the IMF programme."

They leaked the distorted private conversation around 12 to 14-hour ahead of the IMF meeting scheduled for deciding the fate of the loan programme. "The audio could have been leaked after the IMF resumed the programme."

He recalled that the top leadership of the incumbent government had termed the IMF programme a case of treason and attack on the country’s sovereignty and security when the then PTI government was making efforts to get the programme resumed in January 2022.

And today, he said, the PML-N coalition government had agreed a tougher programme with the IMF on harsh conditions.

Comparing the current situation in the country with the one that happened in Bangladesh in the past, Tarin said, “What has happened here is worse than what happened in Bangladesh … in December.”

He urged all the parties, including the PTI, to give up the policy of issuing treason certificates to their opponents. "Treason charges should not be levelled against anyone unless something really seriously happens like leaking country's confidential information."

The political gimmickry like leaking "distorted audios" and placing treason allegations do divert attention from real issues of the nation to the non-issues and "weaken democracy".

"Criticism on policies should not be treated as treason because democracy gives liberty to speak and criticise policies.”

He said the rupee resumed its declining trend against the dollar after a brief rally seen during the last two to three days.

He said the rupee depreciation, high inflation reading and interest rate at 15% would altogether increase the amount of interest payment by Rs1-1.5 trillion this year as compared to last year. Pakistan paid Rs3.9 trillion in debt serving last year.

Also Read 'Magnitude of loss huge compared to resources': Govt, army resolve to fight floods

He also criticised the incumbent government for taking huge new loans in its initial four-month rule, saying: "Now, you come to know why the debt increased."

Ismail’s presser

Finance Minister Ismail on Saturday said real freedom meant economic self-reliance, without which the concept of freedom and self-reliance could not achieved.

“The PTI government took 79% external debt out of the total debt taken in the country’s history,” he told the media persons.

The finance minister said during the PTI tenure, Pakistan’s imports jumped up to $80 billion while the trade deficit reached $48 billion, which was a record in the country’s history.

Miftah wondered how the PTI could talk about real freedom without achieving economic self-sufficiency.

The minister said, “We have saved the country from a situation like Sri Lanka, where petrol and gas are blacking out.”

Miftah said that the former PTI government was leading the country towards default and the PML-N government – under the leadership of Prime Minister Shehbaz Sharif – saved it from bankruptcy.

The minister criticised the role of PTI, saying that the country was passing through a critical juncture after floods while the PTI was busy in its politics altering national interest.

Miftah said that former PM Imran did not fulfill any of his promises, including the construction of five million houses.

The finance minister maintained that the government was distributing Rs25,000 to four million families each in the flood-hit areas which would cost Rs70 billion overall.

He said that cotton, sugarcane and date crops had been destroyed in Sindh.

He claimed that the government would import tomatoes and onions from Turkiye and Afghanistan, adding that inflation would be controlled in the next couple of months.

Ismail said that PTI was investing $25,000 per month for lobbying which was against the national interest in the current situation.

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