Miftah foresees default if Pakistan shuns IMF

Says the country was safe as long as it stayed in the programme

KARACHI:

Former finance minister Miftah Ismail said on Monday that he fears default if Pakistan did not approach International Monetary Fund (IMF) at this crucial time.

He expressed these views at a two-day global conference arranged by Economics and Management Sciences Department of NED University.

He said, “We were safe for the first three years since we were in IMF programme.” After that, he added: “Imports increased rapidly in the first two years but exports could not be boosted because we had artificially stabilized the rupee.”

Earlier, Pakistan Munslim League - Nawaz (PML-N) finance ministers (former and incumbent) developed difference of opinion on reaching out to IMF. In an interview to a private channel, Finance Minister Ishaq Dar said the IMF could not dictate the government, adding: “If they don’t come then we will manage — no problem”.

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This goes contrary to what Miftah Ismail has been warning against.

Quoting some key figures, Miftah said that exports reached $31 billion last year while remittances stood at $30 billion. Citing difference between income and expense to be $19 billion, he said that total income was $61 billion and expense soared to $80 billion.

The former finance minister said, “CPEC is the guarantor of economic development of the country,” adding that the companies invested in Pakistan after government gave them loans.

Speaker Shabbar Zaidi said that CPEC suffered in the “Cold War” of China and USA. He said that Pakistan needed $50 billion for energy and better infrastructure, adding: “CPEC is our need not an option for us to choose.”

College of Economics and Social Development Dean at IoBM University Professor Dr Shahid Wizarat said, “Devaluation of currency results in cheap exports and expensive imports,” adding that it also puts local industry “out of competition”.

Raising concerns over cruel conditions of IMF, he suggested that the import of luxury items should be banned to encourage local industry and control inflation.